The most important demand of agitating farmers is the guarantee of minimum support price i.e. MSP. However, experts say that only this will not relieve the pain of the farmers. Apart from MSP, timely procurement of public collection system, public procurement system (PPS), and agricultural products are also necessary.
If any one of these is excluded, then the entire structure will have no meaning. That is, MSP, Mandis, and PPS will be available only if there are three benefits.
MSP and public collection system PPS benefited most of the paddy, wheat-producing farmers in the 70s. In today's era, the objective of MSP and PPS is twofold. First, food crops self-sufficiency under climate change and drought-prone conditions.
Second, to ensure an income of farmers. It is also challenging to fulfill the second objective because 86 percent of the farming families are either marginal (holding less than 1 hectare) or smallholdings (holding one to 2 hectares) who are forced to sell their agricultural product immediately.
What is MSP?
If ever the price of many crops falls according to the market. Even then, the Central Government buys the crop from the farmers at the fixed minimum support price so that the farmers can be saved from loss. The MSP of a crop is the same across the country. The MSP is decided based on the recommendation of the Commission for Agricultural Costs and Prices (CACP) under the Ministry of Agriculture.
Why don't every crop of MSP benefit?
The government declares MSP for 23 crops. But on this, there are mainly two crops. For example, the price of maize was Rs 1760 per quintal in 2019-2020. Farmers in Bihar got an average price of Rs 1250 per quintal in the market. In Haryana, it was only 1000 to 1200 rupees per quintal.
Mandis have to be laid
Two things are necessary for grain collection. The first mandi network, like Punjab, has a mandi every 20 km. There are currently 7000 APMC mandis. If mandi has to be made every 5 kilometers, then 400 mandis will be required. The second is to make MSP legally bound for 23 crops. There will be no scope in the whole country that any trader can buy below it. - Devendra Sharma, Agricultural Specialist
How is MSP decided?
For estimating MSP, the Commission for Agricultural Costs and Prices divides the cost of farming into three parts.
A2, A2 + FL and C2. The MSP that is currently being decided on the cost of the crop is A2 + FL.
A2+ FL: All kinds of cash expenses incurred by farmers for production like seeds, compost fuel and irrigation etc. are included.
Estimated wages of the peasant family are also added to the family labor i.e. crop production cost along with the cash expenditure.
C2: Business model of farms is adopted. This includes the total cash cost and family remuneration of the farmer, plus the rent of the farmland and interest in the total agricultural capital.