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The Narendra Modi government has betrayed farmers on its promise of providing remunerative minimum support prices (MSP) by announcing floor prices for rabi crops for 2018-19 far below the promised C2+50 per cent, All India Kisan Sabha (AIKS) said on Thursday.
“What is notable is that this comes just after the much-hyped claims after farmers’ protests on Tuesday that the BJP will address all concerns of the farmers, including their demand for MSP according to the Swaminathan Commission recommendations,” AIKS, affiliated with the CPI-M, said in a statement.
The government, while announcing the new rates, failed to take into account the huge increase in input costs. While fertiliser prices have increased by about 25 per cent over the year, that of diesel has gone up 27 per cent in the last one year, it said.
“The Prime Minister is now making a desperate effort to cover his failure by claiming that the BJP Government is already giving MSP over and above cost of production by shifting goalposts from C2+50 per cent to A2+FL+50 per cent,” AIKS said.
Meanwhile, rating agency India Ratings said increasing the MSP is not the solution. “To keep the farming lucrative and farmers incentivised there is no choice but to raise MSP in line with the rise in the cost of production of agricultural commodities. At the core of the rising MSP is the stagnation in agricultural productivity,” it said. There is an inverse relationship between the real cost of production and productivity. Therefore, a prudent response to the ever increasing cost of production lies in the enhancement of agricultural productivity, India Ratings. said
It, however, said that as the increases are marginal there will not be much impact on wholesale/retail inflation unlike the MSP for kharif crops, which it sees leading to a 70-basis-point increase in retail and 38 bps increase in wholsesale inflation.
Anuj Kumbhat, co-founder of Weather Risk Management Services, stressed upon the importance of procurement agencies venturing into crops other than rice and wheat.
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