MSP Explainer: What Are The Farmers' Fears? Why Isn't The Government Bending?

The farmers want the MSP formula to be based on the father of the green revolution of M.S. Swaminathan's recommendation.
Representational image.
Lola Nayar Dec 05, 2020

Q) Why are the farmers adamant on a law guaranteeing MSP? How does the current system work?

The central government has so far been fixing the MSP or minimum support price for 22 agriculture produce like paddy, wheat, moong dal, groundnut, soybean, sunflower, mustard and so on. It is the price at which the government buys from the farmers for maintaining buffer stock, for the public distribution system as also to maintain price stability in the open market.

Farmers are insisting that the government makes MSP mandatory as they fear if this is not done big corporates could mop up their produce at very cheap rates. A government guarantee on MSP will ensure that they will not have to sell below that price.

The farmers also want an MSP for all agriculture produce, not only this list of 22. They want the MSP formula to be based on the father of the green revolution of M.S. Swaminathan's recommendation, which in simple terms is 1.5 times the cost of all inputs.

Q) Why is the government not willing to agree to MSP in writing?

The government is reluctant to enforce MSP as a yardstick of fair price as then the burden of buying all unsold stocks would lie with it. The main thrust of the new farm laws is greater private sector participation and investment in agriculture which will provide farmers more options to sell outside the mandis in their vicinity.

Q) Can the concerns of the farmers be addressed by diluting certain sections of the three farm laws?

The agitating farmers seem unlikely to be satisfied by dilution of the three new farm laws unless it ensures them better access to market, better prices, better agriculture infrastructure without putting their livelihood and land at risk. In the past, farmers have seen more failures than successes in corporate farming, big industries procuring their produce and market interventions. They feel even in agriculture insurance and subsidies for fertilizers, the corporates have benefitted more than the farmers.

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