Why Farmers Burn Stubble: A Study on Policy, Middlemen and Market Failure
Two researchers at the Indian Institute of Management (IIM), Amritsar, Sujit Raghunathrao Jagadale and Javed M. Shaikh, studied why farmers in Punjab keep burning paddy stubble (the stalks left in the field after harvest). The study appeared in the Journal of Macromarketing.
They interviewed farmers in Amritsar, Gurdaspur and Tarn Taran districts of Punjab.
The study uses the idea of governmentality (a term from the French thinker Michel Foucault). It means the state shapes people's behaviour not mainly by force, but by setting up the choices they face. The study argues that farm policy itself pushes farmers towards burning.
It points to three pressures: the Minimum Support Price (MSP) system that locks farmers into a rice-wheat cycle, a gap of only about two weeks between the paddy harvest and wheat sowing, and dependence on commission agents (arhtiyas) who control prices, loans and market access.
The study calls burning a "rational choice" under these pressures, not carelessness. It treats the problem as a market failure: there is no working market that pays farmers for stubble, so fire is the cheapest option.
Its suggestions: move beyond penalties alone, build a value chain for stubble (assured prices, biomass plants, transport support), pay farmers a per-acre cash incentive after harvest, support tractor and fuel costs through Custom Hiring Centres, and promote crop diversification.
Stubble Burning: Causes, Consequences and Policy Response
Stubble burning means setting fire to the crop residue (the stalks left after harvest) to clear a field quickly for the next crop. In India it is mainly linked to paddy straw in Punjab, Haryana and western Uttar Pradesh in October and November. The smoke adds to the severe winter air pollution of Delhi and the National Capital Region (NCR). The full concept article covers the causes, the harm, the law and the alternatives in detail.
The IIM Amritsar study looks at the same problem from the farmer's side. It argues that fines alone fail because the MSP system, the short sowing window and debt to commission agents leave farmers with no cheaper option than fire.
Market Failure and Externalities
A market is any place or system where buyers and sellers meet and agree on a price. Usually, markets do a good job: prices tell people what is scarce and what is plentiful. Market failure is when a free market, left alone, produces the wrong amount of something, too much of a harmful thing or too little of a useful thing. The most common cause is an externality: a cost or benefit that falls on people who are not part of the deal, and that nobody pays for.
The IIM Amritsar study frames stubble burning as a market failure. The smoke is a negative externality that farmers do not pay for, there is no working market that pays for straw, and commission agents hold market power over farmers' credit and sales. The study's fixes, such as building a stubble value chain and paying cash incentives, are classic tools for correcting a market failure.
Commission for Air Quality Management (CAQM)
The Commission for Air Quality Management in National Capital Region and Adjoining Areas (CAQM) is a statutory body (a body created by a law of Parliament) that manages air pollution in Delhi-NCR and the nearby areas of Punjab, Haryana, Rajasthan and Uttar Pradesh. It coordinates the work of the Centre, the states and the pollution control boards. It can issue binding directions and impose penalties, including on stubble burning.
CAQM's tools are mainly penalties and directions. The IIM Amritsar study argues that such "disciplinary" steps alone cannot stop burning unless farmers are also given cheap, timely alternatives and a market for their straw.
- Study authors: Sujit Raghunathrao Jagadale and Javed M. Shaikh, IIM Amritsar; published in the Journal of Macromarketing
- Districts surveyed: Amritsar, Gurdaspur, Tarn Taran (Punjab)
- Framework: governmentality (Michel Foucault) and market failure
- Gap between paddy harvest and wheat sowing: about two weeks
- Punjab paddy area: about 32 to 35 lakh hectares; paddy straw about 20 million tonnes a year
- Stubble burning fines (since 6 November 2024): ₹5,000 (under 2 acres), ₹10,000 (2 to 5 acres), ₹30,000 (above 5 acres) per incident
- CRM scheme (from 2018-19): 50% subsidy for individual farmers, 80% for Custom Hiring Centres
- Central spending on crop residue management since 2018: about ₹3,623 crore (as of November 2024)