Soft rotis from Bahlia

Babus and mantris don8217;t understand: the tough Indian kisan is very canny about market opportunities

Indian Express correspondents report that in the swathe of territory from Punjab, through western Uttar Pradesh to Madhya Pradesh, as the Rabi harvest comes in, there is tremendous disquiet on the possibility that private trade will be asked to withdraw. And as this newspaper reports today in 8216;From the Fields8217;, a similar fear is palpable in that very special region called the Bahl, a depression connecting Gujarat to Saurashtra 8212; here too, the farmer8217;s satisfaction at the prospect of gaining record rates for his harvest in the bazaar could be dashed.

This is a fascinating scenario in Indian agriculture, this great sensitivity to the market by the tough Indian kisan. The Jat Sikh or Hindu or with his own gods and the Patel are tracking the market and optimising its possibilities. It is only the babus 8212; or worse still, the small coterie who benefit from throttling the market 8212; who create panic. However, babus and small organised groups who protect the past monopolies for a few can be very powerful. This awareness became clear a few days ago when the son of a friendly Patel was emphatic on not growing cotton and oilseeds, telling me that the price was lower than when I came to the village in the early nineties. I silenced him, only to later check and find he was right. They are certainly doing their sums, and the bazaar is then empowering and franchising them.

There are some special reasons on account of which the market needs care in the case of wheat. The late Ashok Rudra would get upset if you used expressions like the price of rice or atta. There are more than four hundred kinds of rice in India, he would say, and they all have their loyal followers. Ditto for wheat. It is the Mexican variety which threw us into the stupor of a single price and one support price for wheat. In the early eighties, our scientists in Ludhiana produced the wheat Durham Ludhiana, a superior wheat. People are willing to pay for it every time they buy pasta or wheat products. As chairman of the Agricultural Prices Commission, I argued that we should give a bonus for quality, but was ignored. As we grow richer, the lady who goes to the bazaar looks around for taste. She pays more for the Sharbati, the Daudkhani and the Bahlia Vinit. The farmer knows it and knows that the bania will give him a commensurate price, but not the Food Corporation of India. Today these quality wheat varieties are selling at double the procurement price. The Jat and the Patel who grow them are petrified that the bania will be chased away.

High quality wheat also has a local market. The Gujarati housewife, in Mumbai, New Jersey and of course in Gujarat would not dream of serving roti if it is not exquisitely soft and made from the Bahlia wheat.

One must also consider the complex network of trade and transport which serves to give incentives to meet demand. As the economy grows and incomes rise, this is another aspect of diversification, which is not only from one crop to another, but one variety to another. When you demand a pizza, you not only vote for cheese and olives, but Durham wheat and not the Mexican variety.

The government of course wants to fight inflation, but in spite of some threats of cheap imports, it has not lowered barriers in a year in which its choice is limited on account of global stocks being low. But the logic of market achieving most of their objectives doesn8217;t come easy. It is the government mindset which needs to change. I know the machinery we set up in the sixties and improved in the seventies. They served an important role in our drive for self-reliance to banish for ever the ship-to-mouth story.

But India 2007 inhabits a different world. When the decision maker is faced with the choice between market tools which encourage agriculture and generate employment and rural income and policies which constrict them, policy-making requires that you occupy the larger social space out there and junk old files and vested interests. You have to liberate yourself from the tyranny of the reports and rules the Alaghs and others developed for a different world.

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You will need grain for the poor pregnant mother and food for the 8216;food for work programmes8217;. This is where imports, if cheap, would be justified any day. Because with more than 150 billion in foreign exchange reserves, India does not have the luxury to plead that its super economists cannot use the market efficiently to buy grain to feed the poor.

Fifteen years ago a policy was developed to restrict subsidised grain supplies to the deserving and allow the market to do the rest. Reform is overdue. To begin with, would somebody in authority say that the government will not restrict trade in the mandis at harvest time and that for its own needs it will buy competitively if necessary. Competition would do its parastatals some good. If the NTPC and PowerGrid can compete with the private sector, so will the FCI. I always travel Indian if I can. The food is nice, the seats are good, the girls like the ones next door and they give the best selection of newspapers in India or the world. But I argued for private airlines, because I knew Indians would compete. Trust the FCI, Mantriji. Then see the results.

writer is a former Union minister for power, planning and sciences