The passage of the farm bills now by Parliament last week have ignited passions in some parts of the country notably Punjab. The Akali Dal has quite the Modi government and also from the ruling National Democratic Alliance. While many do feel it was contrived and thus artificial given the moves made by Punjab Chief Minister Capt. Amrinder Singh, nevertheless, it has set the political circles talking. On the contrary, it also demonstrates the Modi government’s willingness to walk the hard path even if it means troubles with the party allies. The government seems determined to push forward the agricultural package that would radically redraw the industry as we know it.
It is no doubt a signal of sharp departure from the times of Nehruvian thinking discussed in this post. In the last couple of days, there has been a discussion on the rationale behind the bills. The discussion can be found here and here. The current post seeks to pursue a theoretical underpinning to the resistance that is unfolding in Punjab. Interestingly, in other states, the reaction has been relatively muted. Seemingly, the Punjabi markets seem to have been affected quite heavily by the bills. It also perhaps signals the deep network the political forces in Punjab have developed in seeking to continue the system that has existed for decades despite its obvious flaws. The loss to the networks entrenched in the system seems to be high given the passions that are running. Prof. Subhash Sharma posits the two dimensional interplay of the forces that locate the sources of the problems we are confronted with. In his analysis of the CINE Matrix (2003), he suggests the problems be viewed from the angle of their source (External or internal) and the ability to control (controllable or non-controllable). A representative matrix is illustrated below
| Controllable- Internal | Controllable External |
| Non controllable- Internal | Non-controllable |
The above figure identifies the roots of all the problems or issues that one fronts through the prism of the four quadrants. The first quandrant illustrates the controllable –internal factors, while the second quandrant locates the external factors but are controllable. There are of course factors that are internal but uncontrollable while the fourth are those which are non-controllable and also external. To many entrenched in the system, the passage of the farm bills symbolises the existence of the fourth quadrant. They view it as external factor something beyond their control but nevertheless not ready or reconciled for the same. They view that the new legislations could change radically the shape of the local agricultural markets. As inter-state trade opens up, lot of producers might seek to deliver products outside the state and outside the mandis. There is high possibility of only trading exchanges emerging that would link the farmer to the buyer. Technology has diffused quite fast. Smartphones are no longer a novelty. It is conceivable that many farmers have access and do own smartphones. For them, it becomes a click of an app that might be developed specifically for the purpose. The granularity of the smartphones accompanied by its lumpiness offers multiple avenues to buyers reaching out the to the ultimate seller without the intervention of the external third party mandi with its ecosystem of agents, commission fees, market fees and other assortments.
The ecosystem or the industry has functioned in a cycle that has lasted perhaps six decades. There is what Tim Wu termed as cognitive entrenchment, an industry that has entrenched itself deeply would be oblivious and resistant to innovation. It would lose its creativity and adaptability. This is what perhaps being observed in the resistance that is emerging. Anita MacGahan mapped the industry trajectories in her book How Industries Evolve (HBS Press, 2004). She maps the trajectories as interplay between the forces that facilitate or hinder the core assets and the core activities of the firm. The current round of farm legislations potentially disrupt the core activities of many an economic agents that sprung up in the wake of the APMC system. The commission agents, and other intermediaries who thrived on the system are in danger of their core activities being under serious threat. It is not that they were hindrances. In fact, the system that evolved necessitated the presence of intermediaries. Yet the new systems that might emerge would perhaps need a different set of intermediaries with their own unique skill sets which might hinder the activities of the current set of people engaged in those activities. They might not get destroyed but their current business, in all probability will be. The farm legislations have set in a process of what Schumpeter termed as creative destruction. The process might engulf many who fail to adapt. The fear of failure is bringing them on to the streets. Yet, the differences between Punjab and other states is too stark to be missed. In all probability, the system had entrenched deeply in Punjab. This should not surprise us given the agrarian underpinnings of the state and the delivery of food produce from the state to all other parts of India.
The resistance can take multiple manifestations. To understand the theoretical foundations, one again seeks refuge in the works of Prof. Subhash Sharma (1996). He lists out different modes of manifestations of resistance. The resistance can be classified as violent and nonviolent. To him, the violent resistance usually manifests through resist, scare and attack, and revolt. The nonviolent responses usually take the shape of retreat or adapt. In the current context, while the other states seem to prefer adaptation to the new system, Punjab seems to favour the violent responses. There is no doubt a fear of going back to the 1980s and early 1990s when terror ruled Punjab. Agriculture remained as issue something Akalis wanted as quid pro quo to counter Bhindranwale. The current round seem to see CM instigating the resistance and revolt, a throwback to his days of the 1980s when he led his own Akali faction. The Akali mainstream is perhaps into the same trap as they did when Bhindranwale and his followers created for them.
In fact, as a mode of resistance, adaptablility would be perhaps better suited for the existing APMCs and the ecosystem they have flourished. It is an opportunity to leverage their strengths. As Anita MacGahan points out, while core activities might be threatened, the core assets might come into rescue. In fact, the intermediaries by their sheer presence in the market would have accumulated knowledge at great lengths of the intricacies of the market. These intricacies perhaps are not easy to master. Thus their role could be indispensable in building bridges between the emergent buyers and the sellers thus carving out different roles for themselves. There is a good possibility that many are already planning and might be a reason for muted resistance in many states. Punjab might be an exception given the political patronage to the existent networks and their encouragement often explicit to revolt against the legislations. There are enough possibilities to map the new era, the violent resistance in all probability might fail though end up severely damaging the social fabric. The lines on which the political patronage will progress in the days to come will determine the trajectory of progress in bringing the farmers onto the negotiating table from the streets.
Thoughts on Theory and Practice 