NEW DELHI: Higher Minimum Support Price (MSP) is important to raise farmers income but it is not panacea for all farm woes as its penetration is limited to few states and that too among big farmers, observed experts and critics ahead of the Centre’s plan to announce new support price for Kharif (summer sown) crops this week.
“Higher MSP will surely raise farmers income but MSP alone is not a solution to generate adequate income for all category of farmers,” said Ramesh Chand, Niti Aayog member and key advisor to the government on farm policy, while observing that the move may be beneficial for large or medium farmers due to their high volume of produce.
Talking to TOI on the issue, Chand expressed his apprehensions on whether the MSP would actually benefit small and marginal farmers who, together account for over 85% of the total farmers in the country.
Chand , therefore, pitched for states’ role, asking them to go for reforms as suggested by the Centre (through Model Acts on APMC, contract farming and land lease). “Solution to much of the problems are in the hands of states,” he said.
Announcement of fresh MSP always attracts attention as it not only gives signals to agri market but also sends political message to farmers about the government’s intent to ensure them better prices. Still, it’s not a big issue in states (mostly eastern states) which have, so far, remain untouched of its benefits unlike Punjab, Haryana, western
Uttar Pradesh,
Gujarat,
Maharashtra and southern states.
TOI visited a number of villages in
Jharkhand and Bihar last week to check the ground reality and found that the small and marginal farmers were actually not even bothered about the upcoming announcement of new MSP as they had never got the support price of their paddy.
“We know about ‘sarkari daam’ (MSP) but none of us ever got that price of our paddy. Traders from Ranchi and Ramgarh had come to us last year and bought our paddy at Rs 10 per kg (as against the MSP of Rs 15.5 per kg),” said Sahdev Oraon of Tilayya Tand, Koto village in Ramgarh district.
He told TOI, that farmers in most of the nearby villages had to sell their paddy at the price which was fixed by the agents. “
MSP ke bare main ham sirf samachar sunte hain (We only hear news about MSP),” said Gopal Mahto of nearby Sahi Tand.
A number of small and marginal farmers in villages in Ranchi and Hazaribag districts in Jharkhand and Vaishali, Samastipur, Madhubani and Muzaffarpur districts in Bihar have similar stories to tell.
In the backdrop of what the farmers narrated in these two states, the TOI on Monday spoke to experts, critics and farmer leaders and found that the need of the hour is to simultaneously go for multiple reforms as the MSP alone will not solve the problem.
“It’ll not benefit all farmers unless we find a legal solution. The Centre must bring a legislation, ensuring farmers’ right to guaranteed remunerative MSP for all agricultural commodities,” said farm activist Kavitha Kuruganti of the Alliance for Sustainable & Holistic Agriculture (ASHA).
A number of farmer organisations, under the All-India Kisan Sangharsh Coordination Committee, across the country have been demanding such legislation by the Centre. These groups also supported 10-day national farmers’ strike last month and criticized the Centre for not taking into account right cost estimation formula to fix the MSP.
As promised by the government in its budget this year, the Union Cabinet is likely to fix the new MSP of Kharif crops at minimum 50% higher than the cost of production of these crops. The government is learnt to have almost decided that the cost of production of these crops would be calculated on the A2+FL formula which includes actual paid out cost of all inputs plus imputed value of unpaid family labour.
If the Cabinet decides to give minimum 50% returns on A2+FL costs, the MSP for paddy will go up from existing Rs 1,550 per quintal to minimum Rs 1,700 per quintal in the coming Kharif marketing season, beginning October.
Farmer organisations have, however, been demanding C2 formula (Comprehensive cost including imputed rent on owned land and interest on value of owned capital assets) to arrive at the cost of production.
In the context of farm activists’ recent tirade against the Centre on cost of production and MSP, Chand said, “It’s okay to ask for remunerative MSP and it is also okay to ask the Centre to do its job but farmer leaders should ask states to go for reforms as suggested by the Centre as solution to much of the problems are in the hands of states.”
Critics, however, questioned why can’t the BJP show political will in implementing those reforms when majority of the states are now ruled by the BJP-led NDA.
“The Centre’s role is very important as it has power to regulate import-export of farm produce through adequate policy intervention. Even the input costs, such as cost of diesel and fertilizers, depend on the Centre’s policy,” said Kuruganti.
“If the Centre cannot act on agri issues at the pretext of it being a ‘state’ subject, then why it fixes MSP at the first place?” she asked while referring to what the High Courts in Uttarakhand and Madhya Pradesh had recently observed.
The Uttarakhand High Court had in April suggested the Centre and the state government to “provide legal status to MSP by bringing a suitable legislation” - the step, if taken, will make it a legal right of farmers to get the support price of their produce.
Asked about the solution in a situation where majority of farmers in the country don’t get MSP of their produce, Krishan Bir Chaudhary - president of the Bharatiya Krishak Samaj said, “The government should follow the
European Union (EU) model of having ‘compulsory reserve price’ of farm produce so that no farmer in the country could get the price below that level. The MSP may not serve the purpose unless the government goes for reforms at multiple levels.”