DISCUSSION ON: MINIMUM SUPPORT PRICE FOR AGRICULTURE PRODUCE: THE POLICY AND ITS RAMIFICATION IN PUNJAB
- A webinar discussion on Minimum Support Price (MSP) for Agriculture: The policy and its ramification in Punjab” was held under aegis of CSCS on 4 August, 2020.
- Prominent personalities in the domain of Agriculture, Economy, Geography, and other academia as also farmers and Aarthiyas (Agriculture produce traders) joined the discussion. The audience comprised of a wide segment of society. The discussion was telecast live from the Face Book page of The Punjab Pulse.
- The main speakers were
(a) S. Iqbal Singh Lalpura, a prominent farmer and social worker
(b) Shri Umendra Datt, Organic Farmer, Social worker and Founder, Kheti Virasat Mission, Punjab
(c) Shri Subash Sharma, Agriculture Economist
- Punjab is called the Granary of India; the state has played a sterling role in the success of the green revolution and in making India self-sufficient in food grains. A major segment of the population in Punjab is working in the agriculture domain with a Wheat/Paddy cycle. The sale of the produce is controlled by a Minimum Support Price (MSP) index that is set by the Government for the entire nation. The MSP also assists in ensuring that the complete produce is picked up and remuneration is assured.
- Even though the MSP has been increased steadily over the years and more so by the incumbent NDA Government, it has not kept pace with the inflation levels; its application is also mired with bureaucratic apathy, corruption and other demand and supply issues.
- With rising cost of production and reduced land holding, agriculture no longer forms a lucrative job option for the people, especially youth of Punjab. This is leading to a steady migration to cities and emigration abroad which, in turn, is generating a fair degree of socio-economic stress in the state.
- The impact of the MSP and agriculture policy on the socio-economic domain in Punjab merits discussion and articulation in view of its serious nature.
The proposed discussion will cover the following main aspects:-
(a) The present status of MSP and its ramification of agriculture in Punjab
(b) Initiatives at the state and the national level to ensure adequate motivation through compensation to the agriculture sector.
(c) Options available at the national as well as the state level
Ordinances Passed by the Government
- Also discussed was the possible impact of the three significant Ordinances recently approved by the cabinet of the Union Government with the intention to change the Agriculture policy of the country in a manner that is designed to benefit Indian farmers and transform the agricultural sector. These Ordinances are as follows:-
(a) The Essential Commodities (Amendment) Ordinance, 2020, that amends the existing act to remove all agricultural commodities from the list of essential commodities.
(b) The Farming Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020, designed to promote barrier-free inter-state and intra-state trade and commerce outside the physical premises of markets notified under state agricultural produce marketing legislations.
(c) The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020, which provides for a national framework for agreements with the farmer by any third party. It is an enabling legal framework for contract farming.
- S Iqbal Singh Lalpura gave a detail of the main crop pattern in Punjab in relation to the rest of the country and other issues being faced by farmers as follows:-
(a) In wheat production Uttar Pradesh leads with Punjab in second position.
(b) In Rice Uttar Pradesh leads, followed by West Bengal and Punjab is in third position.
(c) Area under cultivation in Punjab is much less than that in the other leading states, yet it competes.
(d) MSP is a good initiative but only if the Government purchases itself which is not always the case. An example is Makki (Corn) that has a MSP but not assured procurement by Government, hence the price goes down despite MSP. Farmers are being psychologically suppressed into selling short.
(e) Land holding was greatly reduced due to land ceiling and now has gone down further to a stage now when they are too small even for viable cooperative farming.
(f) Government run cooperatives are not very effective, they are mostly occupied in selling of fertilisers while they should be more involved in all inputs including seed and feed and also marketing.
(g) In crops like Potato there is a cycle of one year earning followed by loss the very next year.
(h) Many new crops like Kinu were tried out but were not successful
(j) Food processing and rice mills are not viable while sugar mills are not paying their dues.
- Punjab is in optimum stage of production and despite this it is witnessing suicides by farmers. This put’s a question mark on the agriculture policies adopted by successive Governments. S. Lalpura welcomed the initiative taken by the Government with promulgation of three Ordinances and alongside recommended bridging of the gap between planning and application more so since, being a frontier state, Punjab has a problem in movement of goods to the Indian heart land. Optimum use of free trade and commerce as also tie ups with MNCs become unviable.
- Shri Umendra Dutt expressed agreement with all that S. Lalpura had said. He observed that MSP was conceived to give a boost to the Green Revolution, once the objective was achieved its application has been diluted to an extent that 90 percent farmers are not being able to take advantage of it. Now it has become a bigger issue due to dependence on water sucking crops in the absence of a equitable application of MSP. Some other points that he made are as follows:-
(a) The farmers of India were not fully satisfied with the Ordinances
(b) The agriculture models conceived over time have proved to be anti-farmer, anti-people and have led to the production of poison instead of food. There is a need to look at these models with “sustainability” as the key ingredient. Creating minimum income for the farmers is imperative.
(c) Farmers and not companies should be centric to creation of these new models.
(d) The responsibility of sustainable agriculture should remain with the government, it cannot be privatised.
(e) Decisions need to be political centric since bureaucracy does not have much regard for social initiatives.
- Shri Subash Sharma said that passing of the three Ordinances was a step towards realising the vision of Prime Minister Narendra Modi to double income of farmers by 2020. He clarified that there is no mention of MSP in the three Ordinances which implies that the process of MSP will not be impacted by any way due to the provisions of the Ordinances. The benefits that would accrue from the Ordinances were elucidated by him as follows:-
(a) Farmers had to pay tax to sell their goods in other states. Now they would be free to go for inter-state sale since the Centre has invoked its right of marketing as given in the Concurrent List. The farmer, thus, has been given his fundamental right to market his goods as he desires and that too without impacting the MSP.
(b) The Ordinances will also empower the farmer to retain ownership of the land even if it is given on long lease for farming purposes
- Shri Subash Sharma further observed that the Government cannot micro-manage agricultural affairs and hence the need for community involvement. There is a need to direct Agriculture investment to the rural areas through the medium of private players. He emphasised the need to put a stop to the practice of hoarding.
- There were a few interventions from where the following points emerged:-
(a) MSP decisions have to keep in mind the value put in by the farmers, inflation, losses due to multiple exigencies like natural calamities etc.
(b) Since water is destroying crops, national connectivity of Rivers as conceived by Prime Minister Atal Bihari Vajpayee should be implemented
(c) Since farmers are not educated enough to carry out grading packaging etc their age old relations with Aarthiyas (Agriculture produce traders) needs to be nurtured.
(d) Market fees should be abolished since the money is not being used to create market infrastructure as it should. It is simply a cesspool of corruption.
(e) Farmers who have generations of experience in their traditional occupation should be listened to more than the bureaucrats and white collared experts.
(f) Direct sowing should give way to transplantation to save ecology
(g) There is a need to find alternate employment for farming families so that economic sustainability is ensured.
(h) Innovative alternatives like allotting districts to MNCs for production that is utilised by locally placed processing units should be considered.
- There was a general consensus with regard to the need to ameliorate the suffering of farmer’s who are being driven by despair. The best option would be creation of a system where the buyer goes to the village and the farmer and not the other way around.