By Vikas Meshram
The government has recently tried to give relief to the farmers by making two announcements, one of which is the minimum support price for this year’s kharif crops, and the other is the announcement of 11 new schemes under the Pradhan Mantri Kisan Yojana, in which Rs 2.42 lakh crore has been disbursed. Both these announcements appear to be measures to help farmers by increasing their income but the reality is different. On one hand the Narendra Modi government is fixing the MSP much lower than the promise made in 2014 and is causing a loss of thousands of crores of rupees to the farmers. On the other hand, it is giving a subsidy of Rs 6,000 per year to farmers under the PM Kisan Yojana. But this subsidy does not cover the loss of crop yield over the years.
In 2014, PM Modi had promised to implement the recommendations made by the National Farmers Commission headed by eminent agricultural scientist MS Swaminathan. The commission had recommended that the MSP should be more than 50 per cent of the comprehensive cost of production, which agronomists refer to as the C2 formula. However, the Modi government has omitted several important elements from the MSP based on the revised cost of production, thereby deficient in C2. This revised cost includes all input costs, family labour Expenditure and some other items are included, but excludes the cost of capital expenditure, rent etc. The MSP is calculated by adding 50 percent to this revised cost of production. Under this, kharif crop prices have been announced to increase by 5-10% compared to last year, which the government has said will give farmers remunerative prices for their produce and encourage crop diversification. However, the leaders of the farmers are expressing their displeasure about this increase and are saying that this is a minor increase. The farmers are of the opinion that this is a setback to the government’s purpose of providing cost-effective prices. On the other hand, agricultural experts are of the opinion that An increase in the MSP at the minimum base price will certainly provide some relief to the farmers, but at the same time they say there is no market mechanism necessary to buy at the MSP, so crop diversification is a far-fetched thing.
It is important to understand what is the minimum base price MSP and what are its criteria As an important part of the government’s agricultural pricing policy, the minimum support price is the price offered by the government to farmers for their produce during the harvest season. Through this, the government is able to promote the production of a crop as well as control the consumer price of the product. But even today most of the farmers in the country are unable to sell their produce at the minimum base price at MSP.
Lack of crop procurement centers at MSP, extortion by commission agents who buy most of the produce below MSP and ignorance of MSP among a large section of farmers are some of the challenges faced by agricultural producers.
In view of these obstacles, farmers are demanding that MSP should be given legal status. Farmers say that central and state government should set up adequate market system for this. Mere announcement of Minimum Base Price MSP becomes meaningless unless the agricultural produce of the farmers of the country is purchased at the declared remunerative price.
The Government of India has announced the minimum support price for 17 crops for the Kharif marketing season on June 7. These include two varieties of paddy, two varieties of sorghum, millet, ragi, maize, arhar, moong, udaid, groundnut, sunflower, soybean, sesame, two varieties of cotton. In paddy procurement, prices have been fixed at (Rs 2,183) for 2023 as against last year’s MSP price (Rs 2,040 per quintal). The farmer price has been fixed at Rs 1,455. But this is not based on the cost of the farmer but the cost of the crop, the government has claimed, which includes wages, plows, bullocks, tractors, leased farm land, seeds, fertilizers, manure, irrigation costs, implements and buildings, interest on working capital. It is built by adding only family labor along with diesel/electricity for pumping sets but this claim of Govt is bogus.
The government minimum support price for paddy was Rs 1,360 in 2014-15. Now if we compare from 2014 to 2023, the government has increased the purchase price of paddy by 823 rupees in these 9 years. But if we compare it with inflation, India has registered an average growth rate of 5% in these 10 years. The inflation rate was 6.35% in 2014 and averaged 5.79% in 2023.
Based on this, it can be said that the increase in minimum base price also increases by the same amount by 55% (Rs. 1,360 + Rs. 748 of 2014 inflation = Rs. 2,108). Today, the Modi government is claiming to be giving farmers 50% higher cost-effective prices by including all factors in the cost, but it is nothing more than playing with numbers.
Paddy MSP at Rs 2,183 per quintal is an increase of Rs 75 over the 2014 constant price, which works out to 75 paise per kg of paddy. If we take only the price of diesel, in 2014, diesel was available to farmers at Rs 55.48 per liter, through which tractors are used for agriculture. As compared to 2023, the price of diesel is Rs 87 per litre,Which is 158% compared to 2014. Similarly, the price of urea fertilizer was Rs 238 per 50 kg in 2014, while it was Rs 787 in 2023, which should be considered a huge increase of 300%.
Under such circumstances, on what basis is the Government of India implementing the Swaminathan Commission recommendations of C2+50%? This problem is arising and potato, onion, tomato growers have to bear huge loss of their crops every year. Every year, the country sees pictures and videos of these products being thrown on the streets through social media. It is very painful. Except for MSP on wheat, paddy, and some pulses there is no provision of MSP on most of the products, so the farmer is helpless against the market forces where he has to sell his crop at very low prices.
Absence of MSP on all products makes production of paddy and wheat mandatory for farmers and the government’s efforts to diversify crops are failing and MSP on crops needs to be given legal status by the government. It is not necessary for the government to buy all the produce itself, but the government needs to take care that the traders in the country cannot buy the agricultural produce at a price lower than the MSP.
Foodgrain production is estimated at 330.5 million tonnes in 2022-23, which is 14.9 million tonnes more than in 2021-22. According to government data, this is the highest growth rate in 5 years. As of May 1, 2023, the Food Corporation and state agencies had around 55.55 million tonnes of stocks available, including 26.5 million tonnes of rice and 29 million tonnes of wheat. But this year El-Nino could affect the cultivation of about 51% of the country’s rain-fed land due to a lack of monsoon. But at present the country has sufficient foodgrain stock, so the government does not see any reason to worry.
On the one hand, the government is encouraging farmers to replace rice with less water-intensive crops, but has not created a procurement structure for them at the right price. Suffered huge losses, which required them to invest heavily.
Thousands of farmers have to commit suicide every year due to lack of government protection for crops including groundnut in Gujarat, onion in Maharashtra. There is an urgent need for the government to seriously consider when this cycle will end and literally implement the recommendations of the Swaminathan Commission and give legal status to MSP, only then can diversification in agriculture be truly fruitful.
By keeping the MSP low, the government is not only saving its own resources, which are actually public resources, but is benefiting the entire big business class, which buys grain from helpless farmers at low prices. Farmers need to realize that he is willing to do, which goes against his promise to take care of the ‘food donor’ instead of ensuring that the farmers get the money they need.
About the Author
Vikas Parasram Meshram is a social worker and activities working towards the rights of tribal and marginalized communities.
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