With the hike in minimum support prices (MSPs) and the government going on an overdrive to give publicity to it to build up a pro-farmer image before the coming elections in three states, the question is how to ensure that farmers reap the benefits.
Unless there is a regular procurement mechanism, MSPs will continue to have a notional value except, perhaps, for rice.
The Commission for Agriculture Costs and Prices (CACP), the body which fixes MSPs for 23 kharif and rabi crops, has suggested a way out. It is for bringing in legislation conferring the “right to sell at MSP”, which will give legal backing to the exercise, ensure that crops are not purchased below fixed price and “instil confidence among farmers”. The Commission, however, did not spell out the broad contours of the legislation.
CACP recommendations are not binding on the government, but in this case the advice may gain some traction. In the upcoming monsoon session, farmers under the banner of the All India Kisan Sangharsh Coordination Committee (AIKSCC) are planning to move a private member’s bill, which too seeks to give them a legal cushion by guaranteeing an MSP with a 50 per cent profit margin over the cost of production.
The Farmers’ Right to Guaranteed Remunerative Minimum Support Prices for Agricultural Commodities Bill, 2018, has been endorsed by representatives of leading political parties.
Ensuring that farmers get the benefits of MSPs is a big challenge for the central and state governments.
At present, wheat and rice have regular procurement mechanisms. Coarse cereals such as ragi, bajra, and millets, which have seen a sharp rise in the kharif MSPs for 2018-19, do not have any.
Nafed procured almost 3.2 million tonnes of pulses and oilseeds in 2017-18 at around Rs 160 billion under the price support mechanism and price stabilisation fund.
This was a sharp jump over the procurement of 2016-17, which was just 0.31 million tonnes (mt), but less than 6 per cent of overall pulses and oilseeds production of 2017-18, estimated at 55.14 mt (24.51 mt pulses and 30.63 mt of oilseeds). Such a small procurement hardly makes an impact on the overall price situation. Simultaneously, Food Corporation of India also purchases pulses and oilseeds from farmers. The Commission, for its part, has also come out in support of Madhya Pradesh’s Bhavantar Bhugtan Yojana (BBY), which incurs less cost, and wants its pan-Indian rollout.
“It has been observed by the Commission that under BBY, the cost incurred by the Government of Madhya Pradesh is significantly low, compared to the present system of procurement of crops under MSP and therefore, Commission is of the view that the government should explore the possibility of implementing the scheme on a pan-Indian basis,” a CACP report said.
It has been critical of some methods of claim settlement under the Pradhan Mantri Fasal Bima Yojana, saying farmers should get loans on land value and not crop value.