The Political Economy of Agricultural Policy Reform in India

COMPARING FERTILIZER AND ELECTRICITY SUPPLY 191

of free electricity and energy-saving technology. The interviews conducted for this study do suggest that important environmental NGOs at the state and national levels oppose the privatization of the electricity industry, instead of supporting the reform of electricity subsidies to agriculture. Moreover, environmental NGOs may not consider it strategically wise to oppose farmers’ organizations; rather, they concentrate on areas where there is a congruence of interests, such as rainwater harvesting.

Environmental NGOs do not play a significant role in fertilizer policy reform either. Interviews conducted for this study indicated that environ- mental NGOs have, on occasion, advised farmers’ organizations on the need for adopting organic practices and using organic fertilizers, but no single NGO analogous to the PMGER has become strongly identified with fertilizer policy reforms. In part this is because the environmental impact of fertilizer use is less clear than that of electricity policy.

Differences in the structure of the respective input supply industries (see above) also lead to differences in the interest-group formation. The owners of the fertilizer companies formed an interest group in favor of the current subsidy policies. In the policy discourse, they defended the position that they pass on the subsidies to the farmers as a service, without deriving any direct benefit. One might expect the farmers’ organizations to have taken a position against the fertilizer industry, arguing that the full amount of the subsidies should go to the farmers. However, even though farmers’ leaders mentioned this point in interviews, open confrontation with the fertilizer industry was apparently not a viable or useful political strategy for farmers’ organizations. Because the electricity industry is run by the state in both Punjab and Andhra Pradesh, the management of this industry would be unlikely to oppose the position of the state governments. In fact, to the extent that electricity sector stakeholders formulated a position on the subsidies to the agricultural sector, as the Engineers’ Association of the PSEB did, the major objective was to avoid negative consequences for the electricity industry rather than challenge the subsidies per se. Moreover, as the electricity employees came to see the free-power policy as a strategy against privatization, it entered into a coalition of interests.

The fact that the fertilizer and electricity policies are decided at differ- ent levels influences the political roles of different ministries. At the national level, it appears that different ministries can join different discourse coali- tions. The MoF has been a strong proponent of a market-oriented fertilizer policy reform, and its position has been supported by the Planning Commis- sion. However, the DoF takes a more cautious approach toward reform and strongly advocates for self-sufficiency in urea production. The DoAC, whose interest in the issue focuses on the supply of urea to farmers, also argues

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