HARVESTING HOPE FOR FARMERS: DEMANDING PRICE GUARANTEES NOT JUST A BUNCH OF PROMISES!

The three farm laws, namely the Farmers' Produce Trade and Commerce (Promotion and Facilitation) Act, the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, and the Essential Commodities (Amendment) Act, were introduced by the Indian government in September 2020. These laws aimed to give farmers more freedom in selling their produce and encourage private agricultural investment. However, concerns have been raised regarding the potential impact of these laws on the guarantee of Minimum Support Price (MSP), which ensures a minimum price for farmers' crops to protect their interests.

Why were these laws introduced and their significance in the agricultural sector?

The Modi government introduced the Assurance and Farm Services Act, and the Essential Commodities (Amendment) Act, to modernize and liberalize the agricultural sector. These laws aimed to create a more competitive and efficient market by allowing farmers to sell their produce directly to buyers, bypassing traditional middlemen. However, as nefariousness and incompetence would have it, the lack of a guaranteed Minimum Support Price (MSP) under these laws could leave farmers vulnerable to exploitation by big corporations and result in a decline in their income security. This again indicates how the BJP is only working for big businesses and corporate friends.

This article aims to critically analyse the implications and controversies surrounding these agricultural laws, particularly focusing on the potential exploitation of farmers by big corporations and the impact on their income security. Additionally, it aims to evaluate the BJP government's objective of promoting a competitive and efficient market, while considering the concerns raised by critics regarding the absence of a guaranteed Minimum Support Price (MSP) for farmers. 

What is Minimum Support Price?

The Minimum Support Price (MSP) is a government-announced price at which the procurement agencies buy crops from farmers. It serves as a safety net for farmers, ensuring that they receive a fair and remunerative price for their produce, irrespective of market fluctuations. The MSP system has been crucial in providing income security to farmers and preventing distress sales. However, critics argue that the new agricultural laws may lead to the dismantling of the MSP system, leaving farmers vulnerable to exploitation by big corporations who may offer lower prices for their crops. This concern has been one of the main drivers behind the protests and demonstrations held by farmers across the country. 

The Minimum Support Price (MSP) system in India was introduced in the 1960s as a part of the Green Revolution. It aimed to incentivize farmers to adopt modern agricultural practices and increase food production. Over the years, the MSP system has evolved to cover a wide range of crops, including cereals, pulses, oilseeds, and cotton.

The Swaminathan Committee’s National Commission on Farmers gave its recommendation on MSP through several reports between 2004-06. The NCF had recommended that the MSP should be at least 50 percent more than the weighted average cost of production. This was also known as the C2+50 percent formula, which includes the input cost of capital and the rent on the land, to give the farmers 50 percent of the returns.

The MSP plays a crucial role in stabilizing agricultural markets by ensuring that farmers receive a fair price for their produce. It acts as a benchmark price and provides farmers with a safety net against market fluctuations and price volatility. By guaranteeing a minimum income for their crops, the MSP system helps prevent distress sales and provides income security to farmers.

Furthermore, the MSP system has been instrumental in reducing rural poverty and improving rural livelihoods. It encourages farmers to invest in their farms, adopt modern technologies, and increase productivity. This not only benefits individual farmers but also contributes to overall food security and economic growth.

What does it cost the government to provide MSP?

Short-sighted BJP legislators and policymakers cite many disproportionate figures, such as Rs 10 lakh crore as the minimum required for a legal MSP guarantee. This is utterly misleading, as market intervention is only required in the event of a price crash and only for specific crops. In any event, the government can create a domestic or international channel to sell these crops and recoup the majority of its costs. Therefore, the cost of such an operation is not expected to be very high. 

Additionally, the fact that farmers are losing money on their crops is another reason why many of them are in debt and requesting loan waivers. There would be no cause to be in such debt traps if a legal MSP made sure to pay their expenses with a respectable income beyond it. This will alleviate a significant issue that the Indian economy and agriculture are currently facing.

Criticisms of the new farm laws in providing MSP

However, the new agricultural laws may undermine the MSP system by allowing private players to bypass it and negotiate directly with farmers. This raises concerns about potential exploitation by big corporations that may offer lower prices for agricultural produce. As a result, many farmers have taken to the streets in protest against these laws, demanding protection for the MSP system and their livelihoods. 

The Modi government has received a lot of backlash yet again from opposition leaders, social activists, and agronomists for conferring MS Swaminathan with the Bharat Ratna on one hand and ignoring his recommendation for MSP on the other. The three farm laws have been rightfully deemed as “Teen Kaale Kaanoon” (3 black laws). Rahul Gandhi in his Bharat Jodo Nyay Yatra has described his vision to legally give the MSP guarantee if and when Congress comes to power. Gandhi has promised a legal guarantee on MSP that will bring 3 big changes in the lives of farmers. By getting the right price for the crop, the farmer will get rid of the debt problem. No farmer will be compelled to commit suicide. Farming will be a profitable business and farmers will become prosperous. And a prosperous farmer will change the destiny of the country.

• Mohammad Ahwar