The Centre's Rs 300-crore compensation package for Punjab's paddy farmers is being hailed as historic. It is nothing of the sort. Throwing a lot of money at problems never made them go away. Under a deal which Punjab's Food and Civil Supplies minister praises to the skies, the Food Corporation of India is required to buy all the paddy lying unsold in the state's mandis, including substandard paddy estimated by the FCI to be as much as 80 per cent of the crop this season. For losses on account of purchases of substandard paddy the FCI will be compensated up to Rs 300 crore by the central government. With this, agitating farmers who have been blocking roads and rail tracks since late September are expected to go home satisfied and Chief Minister Prakash Singh Badal hopes to proclaim a famous victory. Nothing is solved. The underlying problem which has led to progressively larger harvests of fungus-ridden paddy every year is not addressed. The distortions in agriculture created by politically-inspiredever-higher levels of procurement prices remain untouched. The costs to the central exchequer are high, the benefits dubious. The only thing the money may achieve is peace for a time. What it shows is that it pays to be an National Democratic Alliance partner. There is no policy justification for this package. The FCI's godowns are overflowing with rice. It does not need more for the buffer stock or the PDS. Farmers need to be protected of course from price volatility. But crop insurance ought to take care of things when the harvest is blighted. Experts from the Punjab Agriculture University or Rice Research Centre should have been asked to study the soil, seeds, other inputs and come up with practical answers. There is certainly a major crisis in Punjab's farms when 80 per cent of the paddy turns out to be badly damaged. But if farmers themselves are not doing something about it after the warning signs of the last few years, it would have to be because they know government procurement agencies will always step in and buy up the produce anyway. Thus there are many things that need to be attended to. A Rs 300- crore throwaway will not do it. On the contrary, the ``solution'' for blightedpaddy is likely to create fresh problems. It seems far from likely that the FCI will be compensated to the full extent of its losses. If it is true that four-fifths of the paddy is substandard and the FCI ends up buying most of it at Rs 540 to Rs 510 a quintal, its losses will be upwards of Rs 2500 crore. This is not counting losses sustained from the earlier lowering of paddy procurement norms. It looks very much as though FCI Chairman Bhure Lal's worst nightmare is going to become reality. Where is the Centre going to draw the line? Haryana's farmers who are said to have similar troubles are waiting their turn. Leave aside the burgeoning fiscal deficit, Yashwant Sinha is in danger of being accused of double standards if he does not come up with the money for drought stricken farmers in Madhya Pradesh and Rajasthan. MP, for example, where 48 out of 61 districts are dry, now demands Rs 795 crore for drought relief. What price peace in Punjab?
