Farmer Protest / How important is MSP for farmers... What is the compulsion of the government? know

Vikrant Shekhawat : Feb 14, 2024, 01:40 PM
Farmer Protest: Once again the farmers have turned towards Delhi march. Farmers have also clashed with the police at Shambhu border for not entering Delhi. This is the second time in recent years that farmers have protested against the central government. Minimum Support Price (MSP) is a term which is once again in the headlines. Earlier, this has been discussed again and again regarding the farmers' movement. Farmers are demanding that the government make a law regarding MSP i.e. make it mandatory.

At present, on the recommendation of the Commission for Agricultural Costs and Prices i.e. CACP, the government announces MSP for 23 crops, of which 7 grains are paddy, wheat, maize, millet, jowar, ragi and barley. It also includes five pulses, gram, arhar, urad, moong and lentils. There are 7 oilseeds and 4 cash crops of cotton, sugarcane, copra and raw jute. It is worth noting that products like fruits, vegetables or milk obtained from cattle are not included in these. Apart from this, the government buys wheat as well as one or two other crops like cotton from the farmers at the rate of MSP.

Till now the government decides the MSP of some crops through CACP. To decide the support price of crops, there is a committee to decide the minimum support price, which has different members and some farmers are also included in it. Then he decides what will be the MSP of any crop. However, experts say that the MSP for which the farmers are agitating will not do much good for them, rather the central and state governments should create a system for the farmers, through which the farmers can get the maximum support price instead of the minimum support price. Focus yourself towards. At the same time, if the government buys all the MSP crops, it will need a budget of about Rs 17 lakh crore in a year.

Is MSC beneficial for farmers?

MSP i.e. Minimum Support Price is the minimum rate at which the government buys grains from farmers. MSP is announced by the government twice a year before sowing in Rabi and Kharif seasons. The objective behind this is that the farmers should be encouraged to produce the crops on which MSP is being given and the grains of the farmers should be sold at least at the MSP rate so that they get the right price for their produce.

Experts also believe that if the government gives money to farmers through MSP, then ultimately it will have a direct impact on the GDP growth of the country. The farmers of the country are poor, if MSP is given to them, their income will increase and then their purchasing power will increase, then the GDP of the country will also increase faster. Currently the government gives MSP only on 23 crops, but in reality it is implemented properly only on three crops. If farmers are given MSP on all crops, they will shift from wheat and rice to other crops and it will act as a booster dose in the country's economy.

What is the challenge before the government?

Farmers transport their crops from their fields to the grain markets of the states. Among these crops, Food Corporation of India has purchased wheat and rice at MSP rates. FCI gives these grains purchased from farmers to the poor at cheaper rates, but even after this the stock of grains remains with FCI. Experts say that the government buys only 13-14 percent of the grains produced as MSP, the rest of the grains are sold in the open market. This 13-14 percent of the food grains purchased by the government is also filled in warehouses, which the government is not able to distribute. When the government announced free grains after Covid, the subsidy bill reached around Rs 3.30 crore, even that grain could not be distributed.

The CACP report also says that the government has a storage of 74.3 million tonnes including wheat and rice in the FCI warehouse, which should be 41 million tonnes i.e. India has 33.1 million tonnes more wheat and rice stored than required. Shanta Kumar's report says that only 6 percent of the farmers of the country get the benefit of MSP and secondly, the PDS i.e. Public Distribution System under which FCI purchases grains at MSP and distributes them to the poor, is the most expensive food security system in the world. Is one of.

According to Alok Sinha, former Chairman of Food Corporation of India, to buy wheat from the market above the MSP, FCI has to pay 14 percent procurement cost i.e. Mandi Tax, Arhat Tax, Rural Development Cess, Packaging, Labor, Storage. Then 12 percent has to be spent on its distribution, which includes labour, loading and unloading. After this comes eight percent holding cost, that is, FCI spends 34 percent more on purchasing wheat above the MSP.

Meaning, if the MSP of wheat is Rs 2000 per quintal, then the government has to spend approximately Rs 2680 per quintal in distributing it to the public in PDS. Apart from this, FCI also has to take 8 percent low quality crop, its loss is separate, that is, neither the 82 crore farmers of the country get benefit from MSP, nor the agricultural economy gets strengthened, nor the agricultural policy of the government. Is able to achieve success.

America also stopped subsidies

In many countries of the world, subsidies on agriculture have been available and they have been changed and discontinued from time to time. A shocking example here is from America. In 1977, when Jimmy Carter was the President of America, he decided that the prices of milk would increase every 6 months. Due to this, milk production started increasing and the government decided to buy milk. This led to a shortage of milk stores in America. Then the American government decided that now the government will buy cheese and not milk.

After that the cheese making companies started buying milk. At that time, the problem with cheese was that farmers were selling spoiled milk, so the American government recruited cheese testers. Soon all the warehouses were filled with cheese. The government also built a warehouse the size of 120 football fields, but the problem did not subside. By the time Ronald Reagan became the President of America in 1981, 200 crore dollars i.e. 14875 crore rupees of tax payers had been spent on purchasing cheese. After such huge losses, Reagan stopped this plan.