Budget 2021: Battling farmer angst, FM reaffirms commitment to MSP in Budget speech

Union Budget 2021: In a move aimed at assuring farmers protesting near Delhi borders and in other parts of the country, Finance Minister Niramala Sitharaman today said that the central government was committed to the minimum support price regime and that a part of the agriculture fund set aside in the Budget would be used for developing APMC infrastructure.

During the budget presentation in Parliament, Sitharaman today said that the government was committed to farmers’ welfare and that a part of the agriculture fund would be allocated towards APMC for infrastructure development. She reiterated the Narendra Modi government’s vision of doubling farmers’ income in the Budget Speech. She said that the MSP had been increased 1.5 times and the procurement of paddy and wheat had also gone up significantly.

“The MSP regime has undergone a change to assure a price that is at least 1.5 times the cost of production across all commodities. Procurement has also continued to increase at a steady pace. This has resulted in increase in payment to farmers substantially. In case of wheat, total payment paid to farmers in 2013-14 was Rs 33,874 crore. In 2019-20, it was Rs 62,802 crore. In 2020-21, it was Rs 75,060 crores,” the Finance Minister said.

Sitharaman said that the cotton farmers saw a stupendous increase in the amount that was paid to them. “Cotton farmers saw a stupendous increase in the amount that was paid to them in 2013-14, that was Rs 90 crore and it was increased to over Rs 25,000 crore in 2020-21,” she said during the budget presentation.

In the Budget, Sitharaman has increased Agriculture Infrastructure Fund to Rs 40,000 crore and Micro Irrigation Corpus to Rs 10,000 crore, almost doubled. Agriculture credit target has been raised to Rs 16.5 lakh crore in 2021-22. During the speech, she said that over 43.36 lakh wheat growing farmers benefited from the Centre’s MSP procurement scheme against 35.57 lakh previously. “Farmers paid Rs 75,100 crore on wheat MSP in FY21,” she said.

Following the passage of three laws, farmers mainly from Punjab and Haryana feared that by allowing private players in procurement business the Centre may be moving towards closing down state-run mandis, where they sell their produce at MSP. Their argument is that since private players will not have to pay any charges they will have the upper hand in offering prices thereby cornering the larger chunk of produce that will eventually hurt APMCs, where no farmer will turn up to sell. And if this continues, APMCs over the period will shut down and MSP will no longer be there. However, the government recently agreed to allow the states to charge some fee from private players if it wanted to put them at par with APMCs.