Mohd Iqbal Marazi
Minimum Support Price or MSP’s is a form of market intervention by the government of India to ensure agricultural producers against any sharp fall in farm prices. Last month in June 2023 ,the centre announced the minimum support price (MSP) for the year 2023 (Kharif) season crops ,hiking prices between 5-10% from last season,to ensure remunerative prices to growers fo their produce and to encourage crop diversification.
WHAT IS THE GOVERNMENT’s ANNOUNCEMENT:-
On June 7,the government announced the MSP for 17 kharif crops,like paddy,pulses (moong,arhar,urad), oilseeds like groundnut, soyabean and cotton for the marketing season of 2023-24.These were approved at a meeting of the Cabinet Committee on Economic Affairs (CCEA). According to the government statement,the increase in MSP is in line with the union budget 2018-2019 announcement of fixing the MSP at a level of atleast 1.5 times the all- India weighted average cost of production, which aims at a reasonably fair remuneration for the farmers.Food Minister Piyush Goyal said the increase in MSP of kharif crops for year 2023 is the highest compared to previous years.
HOW DOES THE MSP WORK:-
The MSP,which is a part of the government’s agricultural price policy, is the price at which the government offers to produce farmers procure farmers produce during the season. It works as a tool to stabilize production and to control consumer prices, yet farmers across the country have been facing problems of selling their produce at the MSP.Delays in establishing procurement centers, exploitation at the hands of commission agents who most of the time buy the produce from farmers below the MSP and a lack of awareness about the MSP among a large section of farmers are some of the challenges growers have been facing for years.Against this background, farmers have been demanding a ‘legal Status’ to the MSP.The government, including the centre and states ought to come up with a system to setup an assured market mechanism to point out farmers.The MSP has little meaning unless farmers produce is procured or purchased at the assured price.
WHY FARMERS ARE WORRIED ABOUT MSP POLICY:-
Several farmer outfits have expressed their discontentment over the latest MSP for the summer crops terming it as insufficient. According to the ‘All India Kisan Sabha’, the declared MSP is unfair belies the hopes of the farmers and inflicts huge losses in their incomes. Rising input costs coupled with unfair MSP will push large sections of farmers, especially marginal ,small and middle level farmers as well as tenants into indebtedness,says Ashok Dhawale (President of AIKS).
The Bharatiya Kisan Union (Ekta Ugrahan) ,one of the largest farmer unions in Punjab and a member of Samyukta Kisan Morcha (SKM),the umbrella body of around 500 farmer outfits has dismissed the MSP hike,saying the governments notion of ensuring 1.5 times the cost of production on crops does not help in addressing the farmers plight as it does not provide remunerative price.It is merely an eyewash,says the farmer leader Sukhdev Singh Korikalan,as he adds that MSP should be based on the Swaminathan Commission’s Formulla of C2+50%.
WHAT AGRICULTURE EXPERTS SAYING ABOUT MSP:-
Noted Economist Dr Ranjit Singh Ghuman, currently a professor of Economics at Guru Nanak Dev University Amritsar, points out that the fast track record shows that only 3 to 4 crops (mainly wheat,paddy and cotton and sometimes pulses)were being procured at MSP while the remaining crops were being procured at much below the MSP.This is mainly because the farmers are left at the mercy of market forces and the private players.Non implementation of MSP and below-MSP-procurement of a large number of crops has been one of the major hurdles in crop diversification, which is so vital for Indian agriculture and in saving the environment. Ineffective implementation of MSP and non-procurement of all the crops at the MSP is also one of the main concerns of farmers. Such a scenario builds a strong rationale for giving ‘legal Status’to MSP’s as it is the floor or reference price. While facilitating crop diversification it would raise farmer’s income which is being propagated by the government. The MSP attempts to strike a balance between the internet of growers and consumers. The governments price support policy attempts to provide a fair return to farmers while keeping in view the interest of consumers in a way that prices of food and other agricultural commodities are kept at a reasonable level.
Mohd Iqbal Marazi is a Writer, Columnist, Economist and can be mailed at iqbalmarazi999@gmail.com
