In farmers’ protests, the core is procurement

Context: Recent farmers protest against farm acts have highlighted the trust deficiency between government and farmers with regards to public procurement of food grains at Minimum Support Prices (MSP).

An Analysis of Farm Acts.

• Farmers Concerns:
• Withdrawal of the Minimum Support Price (MSP) by dismantling of the public procurement.
• Takeover by large private players in a liberalised market.
• Government’s response:
• The Acts will increase options for farmers in the output markets.
• There is no plan to dismantle the MSP system as there is absolutely no mention of either MSP or procurement in the Acts.

Significance of Public Procurement: mutually important for farmers as well as the government.

• Farmers: Heavily dependent on public procurement and assured price through MSP.
• Nearly 88% of the paddy production and 70% of the wheat production in Punjab and Haryana is procured through the Public Distribution System (PDS).
• Nearly 50% of the coarse grains are also procured from these states.
• Government: Obligations under the PDS and the National Food Security Act (NFSA).
• There are nearly 80 crore NFSA beneficiaries and an additional eight crore migrants.
• In the last three years, nearly 40% of the total paddy production in the country and 32% of wheat production has been procured.
• The pandemic has increased the demand for grains; nearly half of the rice production (49%) and 35% of the wheat production in the country.

Core issue with the MSP-Procurement: - Skewed Procurement: Only 44% of the paddy is procured from other major paddy producing states like Andhra Pradesh, Telangana, Odisha and Uttar Pradesh.

Way forward:

• Reforms the Farm Acts: besides addressing the core issue with the MSP-procurement;
• Strong regulatory mechanism: To ensure fair play by private players vis-à-vis farmers.
• Ensuring transparency in trade area transactions.
• Conciliation with farmers by explaining various provisions of the Acts.

Conclusion: It is imperative that the government reaches out to the farmer groups and assures them of the indispensability of MSP-procurement system.