MSP at centre stage in the Bharat versus India battle

After the surprise announcement by the PM on Gurpurab that the three contentious farm laws would be repealed, it was expected that the agitating farmers on Delhi’s borders would celebrate and disperse back to their villages. Celebrate, they did; but the apex farmers’ body, the Samyukta Kisan Morcha (SKM), made it clear that they were not going anywhere till their other demands, chiefly a law recognising the Minimum Support Price (MSP) is met. MSP, a mechanism that guarantees a minimum price for 23 farm commodities even if the market price falls, is fixed twice a year. However, there is no law that recognises MSP and farmers are fearful that it can be withdrawn at will. They are also demanding that MSP be calculated on the comprehensive cost of production (C2+50%); and that all products, not just 23 commodities, be covered.

Members of the Supreme Court-appointed committee vetting the farm laws have warned that making an MSP law will harm not only farmers in the long run, but traders and stockists too. They point out that an MSP regime is antithetic to innovation and the growth of scientific farm techniques. It also rebels against an open market and promotes survival economics.

What these academics ignore is that agriculture does not have a level playing field with the other sectors. Shetkari Sanghatana leader Sharad Joshi, pointed out decades ago that our country was effectively two nations—the rural economy of ‘Bharat’ and the exploitative urban hub called ‘India’. By an unequal exchange mechanism, the farmers of ‘Bharat’ were exploited by the developed, industrial ‘India’ by layers of pricing and trade controls; this ensured that the farmer did not even get one-fifth of what his produce was sold to the end consumer. Recent studies have shown that high input costs of fertilisers and seeds, and the poor returns have ensured that the average income of farmers has stagnated. A recent report in September pegged the average per capita earnings as low as `30 a day. As long as marginal farming, dominated by small, inefficient farm plots, and lack of investment is the lot of the majority of farmers, a protective MSP law is a necessity.