Minimax and maximin: How the deadlock in govt-farmer talks will break

The farmers might eventually drop the demand for a legislated price in return for a written assurance that MSP will not be abolished

The eighth round of negotiations between the government and Punjab farmers, who don’t represent all of India’s farmers, will be held today.
 
The previous seven rounds have made some progress but not enough for the farmers to stop their protest because they and the government have two non-negotiable positions, because of two reasons. One, the farmers want the farm reform Bills to be totally repealed. And two, they are also demanding a legislated price for wheat and paddy which they grow in large quantities.
 
The Punjab farmers’ demand is basically a demand for an income guarantee. In practical terms they are telling the government to buy whatever they produce at a price fixed by law.
 
The government doesn’t want to do either of these things. It can’t repeal the laws because that would mean political defeat which is unacceptable to the prime minister. But he also realises just how sensitive the issue is politically. He can’t afford to be seen as anti-farmer.
 
At the same time, the government cannot legislate a price because prices can’t be legislated – because then they can’t be changed easily. That’s why no country does that.
 
So we have an impasse.
 
What do negotiating parties do in such cases where a combination of prestige and foolishness leads to rock-hard positions on both sides? How do they break the deadlock?

 
Minimax and Maximin
 
John von Neumann, the German mathematician who invented game theory, figured out the answer way back in 1928. He said in such situations there are two options before each party.
 
One is that it maximises the minimum gain it expects. This is called maximin. And the other is that it minimises the maximum loss it expects. This is called minimax.
 
Looked at this way, we can make some predictions about how the matter will be resolved. But first it is necessary to define minimum gain and maximum loss. When negotiations start both sides have only a vague idea of this. But a resolution of the dispute needs them to be very precise.
 
We can see this precision emerging gradually since the sixth round. Thus some progress has already been made, with the government agreeing not to criminalise stubble burning and not to insist on removing power subsidies.
 
The first concession maximised the minimum gain for the farmers on stubble burning without any cost for the central government. (The citizens of North India, however, will pay a price in terms of their health).

 
The second concession minimised the maximum loss for the Centre by leaving the question of who will pay the electricity subsidy open. It’s unlikely that the Centre will.
 
The 7^th round, on January 5, yielded nothing to either side because the new minimax and maximin haven’t yet been defined. This delay happens when each side tries to wear the other down.
 
But here’s what I think will happen eventually. The farmers will drop the demand for a legislated price in return for a written assurance that MSP will not be abolished. The government should have no objection as it never intended to abolish MSP.
 
The government may also extend MSP to some other minor crops and also guarantee an income — for two or three years only — via cash transfer to compensate Punjab and Haryana farmers while they switch from paddy to other crops.
 
If this happens, and I think it will, we will have reached a mutually acceptable solution of minimax and maximin.
 
This will leave the middlemen (adhtias) less happy as their commissions get reduced. The government could help them out during the transition. If that happens it would be the perfect solution that matches everyone’s needs.