With excess policy intervention, both farmers and consumers suffer

In governance, as in other things, timing is crucial. Take the paddy crop stubble burning, which has shown a sharp spike since the second week of this month. Between November 8 and November 19, the number of farm fires, at 15,475, were more than the 13,238 from September 15 to November 7. And these are the officially reported events in Punjab, Haryana, Uttar Pradesh, Rajasthan, Madhya Pradesh and Delhi. Researchers have suggested the possibility of farmers shifting their burning to the late afternoon period, when the NASA satellites don’t actively monitor the region. Whether or not such “timing” of fires — to avoid satellite overpasses, thereby escaping detection — is happening, tardy paddy procurement by government agencies certainly hasn’t helped. During October, only 8.4 million tonnes (mt) of rice equivalent was bought, as against 10.6 mt and 11.4 mt in the same month of 2023 and 2022 respectively

The above slow pace of purchases was due to inadequate storage space, with much of the rice from last year’s procured crop remaining in Punjab and Haryana. That rice not being moved out in time meant warehouses there having little capacity to accommodate fresh grain arriving from October. It led to un-lifted paddy in the mandis, in turn, prompting farmers to slow down harvesting of their already-ripened crop in the fields. But the more the procurement got extended, the narrower was the window to sow the next wheat crop, ideally by mid-November. With lesser time left between paddy harvesting and wheat sowing, farmers have probably taken greater recourse to stubble burning to clear their fields. Delayed paddy procurement may have, then, aggravated the damage to air quality in north India, including the national capital, this time round.

The cost of not taking a timely decision is also being felt in di-ammonium phosphate (DAP), a crucial phosphorus-containing fertiliser applied at the time of sowing. Lower imports of both the finished fertiliser and raw material/intermediates used in domestic production have left companies with not enough material to sell. With supply not matching the higher demand from farmers on the back of a good monsoon, it has resulted in shortages and reports of sales at above the government-directed maximum retail price (MRP). The government has not just fixed the MRP very low, but also not provided a high enough subsidy/concession to make it viable for companies to import and market the fertiliser. Fertilisers, like rice and wheat, are victims of excess policy intervention. Farmers produce the latter not for the market, but government agencies. They buy urea and DAP at government-fixed MRPs. When decisions on subsidy and procurement are delayed or out of sync with market realities, the ultimate sufferer is the farmer and the general public