The Political Economy of Agricultural Policy Reform in India

COMPARING FERTILIZER AND ELECTRICITY SUPPLY 189

lution was to achieve food self-sufficiency. This goal could be achieved only by making it economically profitable for smallholders to increase agricultural production (Subramaniam 1995). Hence it was essential for the state to ensure the provision of key inputs, such as improved seeds, fertilizer, and irrigation at prices that created incentives to increase production. Although this policy was extremely successful in achieving food self-sufficiency, it also led farmers to expect that the state would continue to guarantee prices. It is no surprise that a rising income gap between the agricultural and nonagricultural sectors spurred political action to increase the subsidies for agricultural inputs.1 The Green Revolution experience created another feature that is equally relevant for understanding fertilizer and electricity policies: the goal of food self-sufficiency. Although reform proponents in both policy fields argue that full food self-sufficiency is no longer important for either political indepen- dence or food security, the analysis conducted for this study clearly showed that food self-sufficiency remains an important political goal among policy- makers and stakeholders across the political spectrum. This enduring point of view has its roots partly in the specific political experience of the 1960s that spurred India’s Green Revolution. In addition, India’s vast size makes it dif- ficult to procure sufficient staple foods and agricultural inputs in international markets in times of acute need. The food crisis of 2008 underlines this point. In the electricity and fertilizer debates, the food self-sufficiency argu- ment enters the political debate in different ways, but in both fields it is invoked to oppose market-oriented reform proposals. In the case of fertil- izer, the goal of food self-sufficiency is cited as an argument for fertilizer self-sufficiency. Accordingly, counterarguments focus on whether and under which conditions India could increase its dependence on imported urea. The food-security argument has entered the debate over electricity in various ways. In Punjab, the importance of ensuring electricity supply to agricultural production in times of crisis has been put forward as an argument against privatization. In the debate about crop diversification—as a strategy to move to less water-intensive crops—food self-sufficiency is invoked as an argu- ment against a reduction of staple-food crop production. Counterarguments focus on shifting staple-food production to regions of India where overuse of groundwater is a less limiting factor.

1 While the Green Revolution played an important role in shaping the current policies for fertil- izer and electricity, one must acknowledge that such developments are not unique to India or other countries affected by the Revolution. Increased pressure for agricultural subsidies is com- mon during the transformation from an agricultural to an industrialized economy. This trans- formation is often characterized by intersectoral income disparities between agricultural and nonagricultural sectors (Hayami and Godo 2004).

Page 1 | Page 2 | Page 3 | Page 4 | Page 5 | Page 6 | Page 7 | Page 8 | Page 9 | Page 10 | Page 11 | Page 12 | Page 13 | Page 14 | Page 15 | Page 16 | Page 17 | Page 18 | Page 19 | Page 20 | Page 21 | Page 22 | Page 23 | Page 24 | Page 25 | Page 26 | Page 27 | Page 28 | Page 29 | Page 30 | Page 31 | Page 32 | Page 33 | Page 34 | Page 35 | Page 36 | Page 37 | Page 38 | Page 39 | Page 40 | Page 41 | Page 42 | Page 43 | Page 44 | Page 45 | Page 46 | Page 47 | Page 48 | Page 49 | Page 50 | Page 51 | Page 52 | Page 53 | Page 54 | Page 55 | Page 56 | Page 57 | Page 58 | Page 59 | Page 60 | Page 61 | Page 62 | Page 63 | Page 64 | Page 65 | Page 66 | Page 67 | Page 68 | Page 69 | Page 70 | Page 71 | Page 72 | Page 73 | Page 74 | Page 75 | Page 76 | Page 77 | Page 78 | Page 79 | Page 80 | Page 81 | Page 82 | Page 83 | Page 84 | Page 85 | Page 86 | Page 87 | Page 88 | Page 89 | Page 90 | Page 91 | Page 92 | Page 93 | Page 94 | Page 95 | Page 96 | Page 97 | Page 98 | Page 99 | Page 100 | Page 101 | Page 102 | Page 103 | Page 104 | Page 105 | Page 106 | Page 107 | Page 108 | Page 109 | Page 110 | Page 111 | Page 112 | Page 113 | Page 114 | Page 115 | Page 116 | Page 117 | Page 118 | Page 119 | Page 120 | Page 121 | Page 122 | Page 123 | Page 124 | Page 125 | Page 126 | Page 127 | Page 128 | Page 129 | Page 130 | Page 131 | Page 132 | Page 133 | Page 134 | Page 135 | Page 136 | Page 137 | Page 138 | Page 139 | Page 140 | Page 141 | Page 142 | Page 143 | Page 144 | Page 145 | Page 146 | Page 147 | Page 148 | Page 149 | Page 150 | Page 151 | Page 152 | Page 153 | Page 154 | Page 155 | Page 156 | Page 157 | Page 158 | Page 159 | Page 160 | Page 161 | Page 162 | Page 163 | Page 164 | Page 165 | Page 166 | Page 167 | Page 168 | Page 169 | Page 170 | Page 171 | Page 172 | Page 173 | Page 174 | Page 175 | Page 176 | Page 177 | Page 178 | Page 179 | Page 180 | Page 181 | Page 182 | Page 183 | Page 184 | Page 185 | Page 186 | Page 187 | Page 188 | Page 189 | Page 190 | Page 191 | Page 192 | Page 193 | Page 194 | Page 195 | Page 196 | Page 197 | Page 198 | Page 199 | Page 200 | Page 201 | Page 202 | Page 203 | Page 204 | Page 205 | Page 206 | Page 207 | Page 208 | Page 209 | Page 210 | Page 211 | Page 212 | Page 213 | Page 214 | Page 215 | Page 216 | Page 217 | Page 218 | Page 219 | Page 220 | Page 221 | Page 222 | Page 223 | Page 224 | Page 225 | Page 226 | Page 227 | Page 228 | Page 229 | Page 230 | Page 231 | Page 232 | Page 233 | Page 234 | Page 235 | Page 236 | Page 237 | Page 238 | Page 239 | Page 240 | Page 241 | Page 242 | Page 243 | Page 244 | Page 245 | Page 246 | Page 247 | Page 248 | Page 249 | Page 250 | Page 251 | Page 252 | Page 253 | Page 254 | Page 255 | Page 256 | Page 257 | Page 258 | Page 259 | Page 260 | Page 261