POLITICS OF FERTILIZER SUPPLY TO AGRICULTURE 79


interview questions. Like Table 6.1, Table 6.2 presents ideal types of these story lines.


The two discourse coalitions differed on the ways they interpreted the agricultural and economic context in which policy was to be changed, the appropriateness of specific policies, the need for and shape of fertilizer policy reforms, the importance of self-sufficiency in urea production, and the consequences of policy change.


Almost all the interviewees who identified with the welfare-state discourse pointed out that 80 percent of farms were small and marginal and that those farmers needed government help to purchase inputs. They further pointed out that given the widespread reporting of suicides in the countryside, end- ing the subsidy would be politically infeasible and inappropriate. They also observed that this policy benefited the poor, as it kept the price of food grains low and helped achieve self-sufficiency in foodgrain production. Such views were presented by people from diverse backgrounds: former directors of the FAI, the chief executive of a fertilizer company, and former secretar- ies of the DoAC. A former Minister of Agriculture said, “Input cost needs to be reduced for the small farmer, who won’t benefit from liberalization.”15 A farm-association representative said that the government subsidized farmers because it wanted to maintain lower food prices, given the large number of poor consumers in India. If the government increased the support prices or allowed farmers to seek market prices, then the subsidy perhaps would not be necessary. However, the same person said that farmers could not survive if the government withdrew from the market. A former director of the FAI said that the association had challenged the government to eliminate the fertilizer subsidy completely and asked how many farmers would be able to afford decontrolled fertilizers.


Members of the market-oriented discourse coalition, on the other hand, asked why the fertilizer sector should remain protected when liberalization has brought gains in other sectors, such as telecommunications. This group, which includes, among others, liberal economists in think tanks, in the press, and in the private sector, ask whether continuing with the fertilizer subsidy is the “best way to raise agricultural production,” given that the marginal return on government spending on fertilizer subsidy is very small (Gulati 2007). This group is fairly unanimous on the idea that farmers’ and fertilizer- producers’ lobbies inhibit reform.


As to the importance of fertilizer subsidy, the market-oriented discourse argued that rationalization of fertilizer subsidy was necessary to reduce the


15 Interview with a former minister of agriculture, New Delhi, June 26, 2005.


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