- By Mayukh Debnath
- Wed, 14 Feb 2024 07:02 AM (IST)
- Source:JND
Farmers' Protest: Thousands of farmers on Tuesday initiated their advance from Punjab towards the national capital as part of their 'Delhi Chalo' protest march over demands pertaining to several issues, with a law on Minimum Support Price (MSP) for their crops being the chief amongst them.
The ongoing protest, an extension of the 2020-21 farmers' agitation, has been called by Sanyukt Kisan Morcha and Punjab Kisan Mazdoor Sangharsh Committee led by farmer union leaders Jagjeet Singh Dallewal and Sarwan Singh Pandher. According to the protesting farmers, the centre promised them better crop prices after which they ended the 2021 protest.
Besides a law on MSP, they are also demanding a complete debt waiver and a scheme to provide pensions to farmers and farm labourers. The 2020-21 farmers' protest was called off after the Prime Minister Narendra Modi-led central government repealed three contentious farm laws and assured that it would look into the demands for legal guarantees for MSP.
What Is MSP?
Minimum Support Price (MSP) is a form of market intervention by the Government of India with a two-pronged aim -- to protect farmers from losses due to sharp dips in prices of their crops and to ensure food security in the country. MSP is a guaranteed price for agricultural produce for procurement by state government agencies and various central corporations, like the Food Corporation of India, from growers.
The Centre announces MSP for around two dozen mandated agricultural crops every year to set a benchmark. The pre-determined principle of the Centre is to keep MSP at levels of one and half times the cost of production, i.e. 50 per cent over the cost of production.
The produce being sold under the MSP policy needs to be at par with standards set by the Centre. Though the implementation of the MSP policy is an established practice of the Union government, there currently is no law that makes it mandatory or sets a standard for the prices set under it.
What Are Farmers Demanding?
The farmers' unions participating in the ongoing protest in the northern part of the country are seeking a legal guarantee for the enforcement of MSP, by means of a nationwide law. The farmers are also demanding the inclusion of provisions in the law sought by them for MSPs to be at a minimum of 50 per cent above the cost of production.
Though MSPs are fixed for 22-23 crops every year, state agencies buy only rice and wheat at the support level, benefiting around just 7% of farmers who raise those crops. State agencies buy the two staples at government-fixed minimum support prices to build reserves to run the world's biggest food welfare programme that entitles 80 crore citizens to free rice and wheat. In this regard, the protesting farmers are demanding the expansion of the ambit of the MSP policy so that growers across the nation can avail its benefits.
Who Recommends MSP To Centre?
The Government of India fixes MSPs on the basis of the recommendations of the Commission for Agricultural Costs & Prices (CACP), an advisory body for pricing policy under the Union Ministry of Agriculture.
How MSP Is Recommended?
While recommending MSPs, CACP considers important factors like cost of production, overall demand-supply conditions, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect on the rest of the economy, besides ensuring rational utilization of land, water and other production resources and a minimum of 50 per cent as the margin over cost of production.
(With inputs from Reuters)