MSP Ain’t Broke, Don’t Fix It

The Indian Express     19th December 2020     Save    
QEP Pocket Notes

Context: Instead of breaking down the framework of Minimum Support Price (MSP) and Agriculture Produce Marketing Committees (APMC), it must be further strengthened.

A brief on India’s journey towards self-sufficiency

  • Ship to mouth existence (the 1960s). Ten million tonnes of wheat had to be imported from the United States (through ships) under the PL480 programme. 
  • Green Revolution (Post 1963): Norman Borlaug provided (to M.S. Swaminathan) seeds of some of his high-yielding dwarf wheat varieties/populations ushering in the “Green Revolution.”
  • Attainment of self-sufficiency (1974): by industrious farmers of Punjab, Haryana and Western UP.

Problems with new farm laws

  • Reactive approach in enactment: due to lack of consultation with the farmers and Urgency in passing the bills during the monsoon session of Parliament.
  • Double whammy for farmers: Loss of income during the lockdown and after the enactment of laws.
  • No guarantee of Minimum Support Price (MSP) and threat due to discontinuation of APMCs (Agriculture Produce Marketing Committees):
    • Fear of emergence of a new class of middle man: and lawyers belonging to big companies.
  • Fear against contract farming: Big companies might become monopolies and exploit both farmers and consumers.

Way forward

  • Continue MSP: Determine it on the basis of grain quality and increase its coverage to other crops as well to promote diversification. Arguments favouring continuation -
    • MSP helped farmers for better price realisation.
    • Recommended by The National Farmers’ Commission: which suggests an MSP of 50 % over and above a farmer’s input expenses.
    • Determine MSP on the basis of grain quality.
  • Continue APMCs: because the fees that “Mandi Boards” collect (for example the Rural Development Fund) have helped build link roads.
    • Significance of APMC procurement: Wheat varieties grown in the “food bowl” states contain 11% protein compared to 7% protein grown elsewhere.
  • Promote crop diversification: By purchasing crops produced other than wheat and rice at MSP.
    • Set up adequate cold-chain infrastructure: To encourage farmers to grow high-value crops, such as vegetables and fruits.
  • Consult farmers in policymaking: E.g.  By including some progressive farmers in the NITI Aayog. A proactive approach is always better than a reactive one!
  • Consult Agricultural Think Tank in policymaking: including World Food Laureates like M S Swaminathan, Gurdev S Khush, Surinder K Vasal, and Rattan Lal.
Conclusion:   India’s population increases at a rate of 15 million per year. People can survive without many things but not without food. The slogan — “If you ate today, thank a farmer” — should be promoted
QEP Pocket Notes