Farm Protests’ Political Fallout: Hike in MSP for Paddy, Pulses, Oilseeds
STORIES, ANALYSES, EXPERT VIEWS
The Cabinet Committee on Economic Affairs (CCEA) Wednesday hiked the minimum support price (MSP) for common paddy to ₹1,940 a quintal for the coming ‘kharif’ (monsoon crops) season, around 4% higher than last year’s price of ₹1,868. To encourage crop diversification, there were slightly higher increases in the MSP for pulses, oilseeds and coarse cereals.
The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
The announcement comes at a time when farm unions have been protesting for more than six months on Delhi’s outskirts, demanding legislation to guarantee MSP for all farmers for all crops, and a repeal of three contentious farm reform laws.
Terming the announcement a false promise as it did not account for the full cost of production, farmers’ groups under the ‘Samyukt Kisan Morcha’ (SKM) noted that some increases, especially for maize, did not even keep pace with inflation. “There is no mechanism that guarantees that every farmer can get at least the MSP as the floor price in the market. Therefore, this is a meaningless concept as far as farmers are concerned, and that is why this movement has been asking for a statutory entitlement for all farmers so that a remunerative MSP can be ensured for all farmers,” said the SKM.
Government on the defensive
“The political fallout of the movement against the Centre’s farm laws is showing,” writes the Indian Express. It is true that “cultivation costs — particularly on account of diesel used for powering tractors, irrigation pumps and harvester combines — have gone up. But that does not justify an MSP increase now, when rice and wheat stocks in public godowns have, for the first time, crossed the 100 million tonnes (mt) mark. Government agencies have procured over 97 mt of these two cereals from the 2020-21 crop so far, breaking even the previous year’s record of 91 mt. When granaries are already overflowing……encouraging more paddy and wheat production makes no economic sense. Farmers should actually be discouraged to grow them, along with sugarcane, as they are water-guzzling to boot.”
The politics behind this is obvious. “Since the launch of the farmer agitation, it has been under pressure to demonstrate that its reform laws aren’t aimed at ending MSP-based procurement. It’s not for nothing that government agencies have bought all time high quantities of paddy and wheat this time from Punjab, where the protests have also been the loudest. With the state headed for polls early next year, and the ruling party forced on to the defensive following the mishandling of the pandemic’s second wave and the electoral defeat in West Bengal, a renewal of the movement is seen as politically inopportune. Once again, it is politics that has taken the driver’s seat.”