'Bold' means more of the same.

"NDA plans bold move to fix rural distress," was a headline yesterday. What is this "bold move"? "The central government, in consultation with states, proposes to launch a new price support scheme for farmers to prevent distress sales at prices below minimum support price (MSP)." This scheme is to be called the "market assurance scheme". Around 25 crops are covered by MSP, which is fixed by the government to protect farmers from losses, in case market prices drop too low due to bumper crops. Trouble is that states do not have sufficient funds to buy excess crops at higher prices and, even if they do procure a crop, they do not have facilities to store them. Perhaps, India is the only country in the world in which 38% of children are stunted and 51% of women are anemic, due to malnutrition, and where hundreds of tonnes of food are allowed to rot every year. When prices drop too low it costs more to harvest and transport food to markets than the sale price, so farmers are forced to let their produce rot in the fields. Farmers plant their crops in response to last year's prices which results in excess and prices crash. This is apparently called the 'cobweb phenomenon'. Surely if production is low farmers must be getting lots of money? Farmers are forced to sell their produce through wholesale markets called Agricultural Produce Market Committee or 'mandis'. These are operated by cartels of traders who charge high prices to customers, while forcing farmers to sell at very low prices. Why not allow farmers to sell directly to customers which will eliminate fees for middlemen and allow discovery of fair prices? Because agricultural income is completely free of any tax in India, so politicians get round that by levying taxes on mandis. High cost of food feeds into high retail inflation and makes voters angry. The government spent Rs 1.4 trillion on imports of agricultural products last year, but this year has slapped a 30% tax on imports of pulses to raise market prices in India, to please farmers. The late Sharad Joshi demanded open markets and consistent policies on farmers which he called a "Marshall Plan". Clear policies that farmers understand, allowing farmers to sell their produce where they want, giving them information on expected weather changes, information on international prices of various crops and providing them with good quality seeds could reduce farmer distress. Instead, about Rs 2.5 trillion will be spent in loan waivers and rural poor are paid for 100 days a year for building rural assets. The central government has promised to bear 30% of the market assurance scheme but fiscal deficits of the states are already causing concern and that of the center will, most probably, be greater than projected in the budget. Farmers don't pay taxes but they vote, that is why they have to be pleased and controlled at the same time. Not easy.