One of the biggest political debates in India over the last two decades or so has concerned the construction of the Narmada dam project. This huge and controversial series of dams, conceived by Nehru in the 1940s, is supposed to supply electricity to India’s national grid, and water to the drought-prone areas of Saurashtra and Kutchch in Gujarat. However its construction entails the relocation of tens of millions of people.

A recent flare-up in this controversy occurred when Medha Patkar, who runs the NBA, went on a fast-unto-death (don’t worry, she didn’t pop her clogs). This was her protest at the central government’s decision to raise the height of the Sardar Sarovar dam, the largest, without having first relocated affected villages as stipulated by the Supreme Court. Her main opponent was Gujarat’s Chief Minister Narendra Modi, an extreme right-winger with a penchant for designer clothes who is considered by many to be directly responsible for the pogrom that saw hundreds of Muslims murdered in riots in 2002.

Modi’s political support on this issue mainly comes from farmers, who in theory stand to benefit most from the dam. However, it is unlikely they will see much of the water. The reservoir is limited, and has been several times oversubscribed. The farmers stand at the bottom of the line for this water, which will be very expensive, with wealthy mill owners at the top. This political reality is reflected in the recent Comptroller and Auditor General’s report, in which it is stated that “the gross average daily intake during the two years of [the Saurashtra canal's] operation was 119.80 million litres a day against the envisaged capacity of 287 million litres a day [42 per cent] only. Of the envisaged coverage of 1860 villages / towns, benefit reached only 543 [29 per cent] villages” (Frontline, June 2, 2006, p44).

Farmers need this water because they are growing cereals like wheat, rice, sugar cane and pulses which require a great deal of irrigation. Farmers receive free electricity to pump water, and as a result “unsustainable pumping has sent water tables plummeting, lakhs of wells and tubewells have run dry, and farmers with dry wells have committed suicide” (Swaminomics, the Times of India, April 30, 2006). For this reason, cereal production has not increased since 1999. This position is clearly untenable, and another powerful force on the government to complete the dam project. Partly as a result of this, inflation has increased in India recently, and the central government has been forced to import cereals and pulses.

The first shipment of imported wheat, from Australia, was immediately quarantined after quality tests found prohibited seeds in it (Financial Express, May 17, 2006). Farmers were up in arms, partly because of the quality issue, but mainly because under an antiquated socialist system staple foods are bought by the central government and doled out to the states under a quota system. Commercial farmers take advantage of this by storing crops privately until stocks are low and prices go up, at which point they can make a tidy profit. Meanwhile smallholders who no longer have enough water to sustain their crops or are indebted to crooked suppliers are committing suicide.

The central government also uses food quotas as a political lever, as was demonstrated recently when the central government cut Kerala’s subsidised wheat quota by over a half (The Hindu, June 3, 2006). Coincidentally this change came directly following the election of a communist government in Kerala, displacing the state’s Congress government (the central government is presently Congress-led).

Are there any solutions in this tangle of vested interests and political empire building?

Farmers should move from growing staples to cultivating high-value cash crops that require less irrigation and hence are kinder to the environment such as “fruit, medicinal herbs, bio-diesel crops … and most flowers and vegetables” (Swaminomics, idem). They could also benefit from local water conservation schemes such as the one that my colleague Rohit Bansal has gone to set up in Himachal Pradesh.

The central government is no longer in a position to subsidise both farmers and consumers of grain. They should at the very least delegate responsibility for grain supplies to the states themselves (Tamil Nadu’s present government won their last election partly by promising to subsidise rice). This would remove a financial and political albatross from the neck of the central government. Modi would find himself isolated and the target of his current support base, and the central government would have removed at a stroke one of its biggest irritants. Such an event is, however, unlilkely to occur under the timid leadership of Manmohan Singh, especially with the communist parties upon which he depends likely to oppose such a move.

  • Rohini

    Correction. It is Rohit Bansal.

    You have good knowledge about Indian economy and the politics that impacts it. I appreciate it :)

  • jez

    Thanks a lot Rohini. I have made the correction.

  • Sarang

    Hello Mr. Humble – A set of pertinent observations. India’s foodgrain policy has come under much debate these days. Amartya Sen takes a good look at it in one of his essays in “The Argumentative Indian”.

    What I would like for someone to do is to publish a comparative study between what India is going through now, and what another large continental nation – the United States – went through in the late 19th century/early 20th century when it came to building big dams and irrigating large tracts of land in states like California. What were the pluses and minuses that resulted from this policy? With a hindsight of a hundred years we can learn much.