MSP guarantee key to ending exploitation of farmers

India farmer protests
The government has assured that there will be record procurement of the Kharif crop in 2020-21.

By Arvind Kumar Singh

Even as the farmers from northern states are camping in the national capital to protest the three new farm laws, the procurement of the kharif crops is underway at government-fixed minimum support price (MSP). The nodal ministries — ministry of agriculture and farmers welfare as well as the ministry of consumer affairs, food and public distribution — are releasing crop procurement data every day. This is the government’s way of showing the world that the MSP system is still very much in force.

This year, more than 40,000 procurement centres are functional for paddy crop. Despite this, the farmers are struggling in states like Uttar Pradesh. They are not getting fair price for their produce as they are forced to sell their produce to merchants and business houses at Rs 1,000-1,200 a quintal, when the Union government has fixed the MSP at Rs 1,868 per quintal for common grade and Rs 1,888 per quintal for A grade variety.

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The government has assured that there will be record procurement of the Kharif crop in 2020-21. Wheat is procured on MSP in 10 states and paddy is procured in 23 states. The government plans to procure 738 lakh tonne paddy from 156 lakh farmers this season at a cost of Rs 1.40 lakh crore. Last year, 627 lakh tonne paddy was procured. The Centre also looks to buy 125 lakh tonne of seed cotton (Kapas) at Rs 35,500 crore.

The government has already procured 413 lakh tonne paddy on MSP. This is an increase of 22.25% over the last year. Out of the total purchase, Punjab alone has contributed 202.77 lakh tonne which is 49.10% of the total. Till November 22, Punjab’s share of the total procurement was 70%. The reason for Punjab grabbing the lion’s share of procurement is systematic preparation and the presence of mandis. However, this year more procurement of wheat took place from Madhya Pradesh, 129.42 lakh tonne, and Uttar Pradesh, 35.77 lakh tonne.

The government has spent more than Rs 73,781 crore on paddy procurement in this kharif season so far. This has benefitted 48.56 lakh farmers in the country. Also, 5,089 tonne copra (the perennial crop) was procured by spending Rs 52.40 crore. This has benefitted 3,961 farmers from Karnataka and Tamil Nadu.

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Procurement of seed cotton under MSP is going on in Punjab, Haryana, Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Telangana, Andhra Pradesh, Odisha and Karnataka. Till December 15, 51,79,479 cotton bales worth Rs 14,894.29 crore have been procured. This has benefitted more than 10 lakh farmers.

The procurement of crops on MSP is not smooth in all parts of the country. Several states face issues with procurement of crops on MSP. At the beginning of this year, Vice President M Venkaiah Naidu had to interfere in paddy procurement in Andhra Pradesh. On March 2, 2020, officials from the food ministry and FCI explained the delay in procurement to Naidu. They also assured that they will offer a solution soon and also promised to pay the pending amount on time.

The protesting farmers are also demanding legal guarantee on MSP along with the rollback of the new farm laws. As the demand for MSP gained support nationwide, forcing Union ministers to assure that they are willing to give this in writing. However, the farmers say this should be made a law to ensure that no one can buy farm produce below MSP. The farmers are also saying that the law should have penal provisions against attempts to procure farm produce below the MSP.

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Currently, the procurement on MSP is limited to just two dozen crops. Barring wheat and paddy, procurement of most of the crops are in a sad state. This is not the first time that such a demand was raised by the farmers. This has been the demand of the farmers from the last century. Late Mahendra Singh Tikait, former president of the Bharatiya Kisan Union, had demanded that 1967 should be considered as the base year for crop prices. He was backed by most of the farmers associations in the country. The issue was debated several times in Parliament and state assemblies. The farmers’ bodies have been demanding that they should get a fair price for their produce irrespective of the buyer, be it the government or private parties.

In the last five decades, the wheat production in India increased nine times and that of paddy by more than five times. However. Despite this, the farmers do not get a fair price as prices start dropping as the harvest season arrives. Indian farmers toiled hard to make the country the third biggest producer of fruit and vegetables. But the farmers are facing tough challenges including low productivity and fluctuating prices as these products are not covered by MSP.

The government has given permission for buying 48.11 lakh tonne pulses and oilseeds under the MSP. However, only 1.72 lakh tonne pulses were procured for Rs 924.06 crore till December 15. This procurement has helped 96,028 farmers in Tamil Nadu, Maharashtra, Gujarat, Haryana and Rajasthan. For procurement of oilseeds and pulses, the government launched the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA). However, 75% of crops were kept out of the procurement scheme. In 2020-21, a total of 22.07 lakh tonne chana (gram) was procured in Rajasthan. In Madhya Pradesh, only 27% procurement of gram took place because of the bye-elections. The procurement of moong dal could not take place in Rajasthan and this led to a loss of about Rs 98 crore to farmers. The farmers wrote to the Union government, but for no avail.

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Farmers have sensed the ill effects of the three new farm laws. They know that if the guarantee of MSP is handed over to the market, then both farmers and consumers will suffer. The government counters this by saying that an administration that is offering schemes such as PM-Kisan Samman Nidhi can never harm the farmers. The government had announced that it will bring over 14.5 crore farmers under the Kisan Samman Nidhi on the basis of land holdings. So far, benefits of Rs one lakh crore has reached only 10 crore farmers. It is clear that very few farmers are getting paid on MSP. Currently, the procurement MSP is limited to just two crops and a number of states. If this is the situation under the watch of the government, one can imagine the condition when the private sector takes over.

This issue was raised in the monsoon session of Parliament. Union agriculture minister Narendra Singh Tomar said the farmers will get more options and better rates for their crops. He said procurement will be done outside the mandis at higher rates. During the debate, several members demanded provision for legal action against those procuring below the MSP, but the government did not concede. This has made farmers suspicious about the new laws. Not just this, the chief ministers of Haryana and Madhya Pradesh said that farmers coming to their state from outside to sell the crop products will be punished. These statements have forced the farmers suspicious.

On July 19, 2019, Vijay Pal Singh Tomar, a BJP MP and former president of the BJP Kisan Morcha moved a resolution in the Rajya Sabha to set up a National Farmers Commission with constitutional status. His proposal got support from members across the political parties. The resolution sought to resolve problems faced by the farmers. It demanded legal action against those who procure crops below the MSP.

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During the coronavirus crisis, the kharif sowing stood at 316 lakh hectares. In the past five years, kharif sowing was done on 187 lakh hectares on an average. However, there was not major increase in the MSP. The Bharatiya Kisan Union protested, saying there has been only minimal increase in the MSP in the last five years. The MSP of paddy was raised by 4.3% in 2016-17, by 5.4% in 2017-18 and by 12.9% in 2018-19. In 2019-20, the MSP on paddy was increased by 3.71%. In 2020-21, the increase was a paltry 2.92%.

The farmers have raised a number of complaints regarding the agricultural price policy and the mandis. The Narendra Modi government had promised to implement the recommendations of the Swaminathan Committee; however, this was not implemented fully. Even despite flows, the mandi system was giving protection to farmers. If this protection is taken away, the farmers in north India will have reach big markets like Hyderabad to get a decent price. This is not practical for a majority of farmers and they will have to depend on corporates.

All these demands have been raised by the farmers who are camping in and around the national capital. The ground reality is that if the farmers are not protected with MSP guarantee, the reforms will push them into a bottomless pit. There is no harm in giving multiple options to farmers. But for small and marginal farmers, local markets are the only option. The law should ensure that no one, including private buyers, can procure farm produce at prices lower than MSP.

(Arvind Kumar Singh is a senior journalist with more than 30 years of experience covering India’s agriculture sector. He is the author of several best-selling books.)