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Would Govt of India make law, ensure MSP for agriculture is 3 times the crop cost?

By Rajeev Khanna*
In a recent order, the Punjab and Haryana High Court said the minimum support price (MSP) in agriculture should be three times the cost of production of major crops to save farmers from distress. It asked the Government of India and the the Punjab government that MSP should be provided legal status, by coming up with a suitable legislation.
But the question is: Would these or a slew of other measures suggested address the agrarian crisis? According to experts, there are many important implications of the the court order, which was made while considering the Punjab State Cooperative Agricultural Development Bank’s move to discontinue a pension scheme citing lack of funds owing to loan waivers.
The two-member High Court bench of Justices Rajiv Sharma and Harinder Singh Sidhu also took up the all-important issue of non-implementation of the Prohibition of Private Money Lending Act, 2007, saying, small and marginal farmers are compelled to raise loans from non-institutional sources.
“As far as agriculture is concerned, MSP should be three times above the cost of production of major crops to save farmers from distress and also to procure food grains for public distribution considering the cost including actual expenses in cash and kind, the loan on lease land, impeding the cost of labour, own capital assets, interest on valuable capital etc,” read the court order.
Announced since 1965, MSP has failed to boost farmers’ income. “Time has come when the MSP should be given legal force by granting legal rights to farmers to get fair value for their crops,” the order insisted. The court added, enforcement must not be left with the bureaucratic setup which thrives at the cost of poor farmers. The state government, instead, "device methods to reduce the role of middlemen in procuring food grains."
Experts have welcomed these as important interventions, regretting, however, the governments have so far failed to give even half of the MSP the court has suggested. “Although MSP is announced for 23 crops, including Rabi and Kharif crops and sugarcane, the procurement on MSP is only done for wheat and paddy", said agricultural economist Gian Singh.
"If the farmer is given legal cover with regards to MSP, the onus will be on the government to procure all the crops for which MSP is announced", he pointed out, adding, as for MSP being three times the cost of production, "there needs to be a mechanism to contain the disparity over land holdings. The principle that the greater the farm size, the greater the remuneration does not work in favour of small land holders."
Quoting the National Crime Bureau Report, the court recalled, the number of suicides by farmers and farm labourers increased to 12,602 in 2015 from 12,360 in 2014 and 11,772 in 2013. Of these, 8,007 were farmers in 2015 and 5,650 in 2014. Data for 2018 have still not been published, it added.
Experts have welcomed court intervention, regretting, governments have failed to give even half of the MSP the it has suggested
Another issue the court addressed was regarding warehouses, saying, there is “no regular chain of warehouses for farmers to store their produce”. According to the court, “If the state government builds sufficient number of warehouses, the farmers can store their crops there and can sell it subsequently at remunerative price."
"Parliament has enacted the Warehousing (Development and Regulation) Act, 2007 but it has not been implemented in letter and spirit", it lamented.
While calling for the implementation of the Punjab Prohibition of Private Money Lending Act, 2007, the court directed that banks should ensure that no small and marginal farmer, whose land holding is less than five acres, is rendered landless. It asked the Punjab government to consider formulating a scheme for payment of reasonable compensation and family pension to families of farmers who have committed suicide.
Commenting on the court recommending a scheme to provide insurance cover, including weather insurance, to farmers for their crops in consultation with the National Insurance Companies along with stakeholders, at minimal premium, Singh said, “It needs to be ensured that loans are taken by farmers only from institutional sources. Further, the families of those who have committed suicides need to be given regular financial support.”
While the court asked Reserve Bank of India to frame a scheme on the manner in which agricultural loans are to be advanced, their recovery and waiver, farmer leader Gobinder Singh of the Bharatiya Kisan Union (Ugrahan) said since the compensation is paid to the person in whose name the land is registered in revenue records, agricultural labourers and those farming on contract hardly benefit.
“The government must conduct a survey every six months to ascertain who is tilling the land and who needs to be compensated,” demanded Gobinder Singh, who hails from Mangwal village in Sangrur, which is one of the districts that have seen maximum farmer suicides in Punjab.“Such interventions, as suggested by the court, have to be made if the farmers are to be saved and the corporatisation of agriculture has to be checked,” he added.
The court suggested that the Punjab government should develop cyber applications for each and every field to see the status of crop to determine its growth and destruction by natural calamities. These apps, which can be prepared Khasra-wise using satellite imagery, would save time as government and bank officials need not go to the field to verify their status.
“The emphasis must not only be on MSP, an issue that follows many other important recommendations of the MS Swaminathan Committee. The issue of land reforms needs to be visited on priority,” said Gian Singh.
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*Senior Chandigarh-based journalist. A version of this article was first published in Down to Earth

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