With the 1977 general election, the Janata (People's) Party came into power, defeating the Congress.
Not surprisingly, Janata involved the wealthy farming class representing the new farmers' movements. This period was the turning point for India's agricultural policies. Unlike the former ruling party, the Janata Party pursed policy operations strongly characterized by the Populist type strategies due to its weak political base. In those days, policies in favor of agriculture, especially commercial farmers' interests, had been employed. The new farmers' movements were even more conspicuous in provincial governments. The activists, however, maintained their position of belonging to no party or faction, and extended typical rent-seeking lobbying activities in which they changed the parties they supported according to their requirements. As the farmers' movements came to directly affect outcomes of elections, the government became reluctant to take policies that might conflict with farmers' interests. As a result, it procrastinated, cutting agricultural subsidiaries despite the fact that the foodgrain buffer inventory had already exceeded the appropriate level and the budget deficit was deteriorating6.
However, as discussed earlier, the degree of the market nexus various considerably depending on classes of the rural communities or on regions. So, the farmers' movements have been diversified without being confined to the simple "urban vs. rural" framework. In recent years, local political parties have made remarkable progress on India's general elections, and this trend is considered as representing diversified farmer interests. Since the demise of the Congress Party's monopolistic advantage, India went into an era of coalitions falling into political chaos. If the reasons for the situation include conflicting interests deriving from the measures against agricultural problems, the disorder of Indian politics will not be easily resolved.
Rising market prices of foodgrains would not only reveal the problems of Ricardian Growth Trap, but also provoke consumer resentment, which would lead to parliamentary reshuffles. On the other hand, falling crop price at farmgate would repel commercial farmers, and lead to political instability.
