The Political Economy of Agricultural Policy Reform in India

POLITICS OF FERTILIZER SUPPLY TO AGRICULTURE 63

the party believes that the industry benefits from the subsidy almost as much as the farmers do. An alternative delivery mechanism needs to be created to provide subsidies directly to the farmers. The BJP is considered to be in favor of liberal economic reform, albeit with nationalist undertones. At the same time, having previously been perceived as antifarmer, the party wants to be careful about its public position on farm sector issues.

Congress Party

The Congress Party, another national-level party, was responsible for the initial attempt at fertilizer-sector reform in 1991. At the time of writing, the govern- ment in New Delhi is led by the Congress-led United Progressive Alliance. Its policy on subsidies, according to the National Common Minimum Program,3 is to reduce subsidies so as to reduce market distortion on the one hand and protect small and marginal farmers and poor consumers on the other.

Rashtriya Lok Dal (RLD)

The RLD mainly represents owners of medium-sized and large farms in west- ern Uttar Pradesh. When the NDA administration was engaged in fertilizer policy reform, the RLD chief, Ajit Singh, was the minister of agriculture. He was also a member of the Group of Ministers responsible for formulating the NPS. He sought to address the difficulties faced by farmers in the form of increased input prices and extremely high levels of indebtedness. In addition, he saw a strong need for reform of the fertilizer industry while realizing that at least 75 percent of fertilizer production had to continue to be domestic, in order to maintain a certain level of self-sufficiency.

Shiromani Akali Dal (SAD)

The SAD primarily represents owners of medium-sized and large farms in Punjab. During the NDA administrations, two out of three fertilizer ministers were from SAD. One of them, S. S. Dhindsa, was also a member of the Group of Ministers that formulated the NPS. An interview with a representative suggested that the SAD’s policy position was focused on achieving self- sufficiency in fertilizer production. Furthermore, it is influenced by the severe indebtedness of farmers and by the belief that the 7 percent price increase recommended by the ERC would impose further hardship on them.

3 The National Common Minimum Program constitutes a set of principles and objectives for the United Front government that was formulated in May 2004 by the Congress and its fourteen allies, which made up the United Front, after the Front swept to power in the fourteenth Lok Sabha elections that year.

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