Economy

MSP hike is too small, say farmers’ groups

Our Bureau New Delhi | Updated on June 02, 2020 Published on June 02, 2020

The minimum support prices (MSP) announced for the kharif crops by the government on Monday are only marginally higher than last year’s even though the costs of cultivation have drastically gone up, said experts and farmer organisations.

The government is claiming that the MSP rates announced will ensure a return over production ranging from 50 to 83 per cent.

“It is indulging in window-dressing or attractively packaging a bundle of lies. The MSP for paddy is not even 3 per cent higher than last year’s even though the costs of cultivation have drastically escalated,” said a statement issued by the All India Kisan Sabha (AIKS), the largest farmers’ grouping in the country.

While the increase in MSP for paddy was around 2.92 per cent, the hike in most other commodities ranged from less than 3 per cent to 5 per cent barring nigerseed and bajra, which went up by 12.71 and 7.5 per cent respectively.

AIKS also said that the CACP cost calculations are questionable and weighted average costs were arrived at by making drastic undervaluation and were nowhere near the actual costs. It deplored the utter insensitivity of the government in times of a pandemic and huge losses already suffered by farmers due to the unplanned lockdown.

“The government is trying to portray that farmers will get 50 per cent more than their expenses by not representing the actual costs incurred by them. Mostly taken in averages, cost of production does not reflect the actual costs,” said Narasimha Reddy Dhonthi, a Hyderabad-based public policy expert and former member of Cotton Advisory Board.

This issue can be addressed if the MSPs are announced at the State level, based on State-level costs. The scale of finance decided by various banks can be the basis for such calculations, Reddy said. One can see huge variation in scale of finance obtained in each district and the national average cost of production.

AIKS, which like most other farmer organisations, is demanding C2 not A2 + family labour as the cost of cultivation, said while the government announced an MSP of ₹1,868 a quintal for paddy on the basis of national weighted average A2 +FL cost of ₹1,204 per quintal, the C2 cost of paddy calculated by the Punjab government was the previous kharif marketing season was ₹2,744 a quintal. It also cited that Kerala procured paddy at ₹2,690 per quintal last year.

According to Ajay Vir Jakhar, Chairman of Bharat Krishak Samaj, said most kharif crops harvested during the previous season are selling at prices lower than last year’s MSP even as the government announced the new MSP rates.

While the prices remain depressed immediately after the harvest, they start going up a few months later. That is not the case this year, he said.

“The government should at least ensure that farmers get last year’s MSP for produce they are selling,” Jakhar said.

Published on June 02, 2020
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