The farmers protesting against the new farm laws have expressed their apprehension that the new farm laws will eliminate the safety cushion of MSP and scrap the mandis, thereby leaving them at the mercy of big corporates.
(This story originally appeared inon Dec 07, 2020)NEW DELHI: A set of three laws on agriculture passed by Parliament in September has led to thousands of farmers staging protests on the outskirts of Delhi over the past two weeks.
The protesting farmers have expressed their apprehension that the new farm laws will eliminate the safety cushion of MSP and scrap the mandis, thereby leaving them at the mercy of big corporates. However, the government has repeatedly assured them that MSP will not be scrapped.
How MSP affects farmers
MSP is the minimum price paid by the government when it procures any crop from the farmers. It is announced by the state-run Commission for Agricultural Costs and Prices (CACP) for more than 22 commodities on an annual basis, after calculating the cost of cultivation.
Food Corporation of India (FCI) — which is the main state-run grain procurement agency — largely buys only paddy and wheat at these prices. The FCI then sells these foodgrains at highly subsidised prices to the poor and is thereafter compensated by the government for its losses.
However, the FCI procurement is not uniform across India. In Bihar, for example, procurement by FCI has remained at less than 2 per cent of the state’s total production. Therefore, most farmers are forced to sell at a discount of about 25 per cent to 35 per cent of MSP.
But millions of tonnes of paddy and wheat are procured from the states of Haryana and Punjab.
The FCI procurement data makes it obvious why farmers from Punjab and Haryana are more apprehensive about any changes in MSP laws.
What the government says
The three farm laws have been projected by the government as major reforms in the agriculture sector that will remove middlemen and allow farmers to sell anywhere in the country.
Until 2020, the first sale of agriculture produce could occur only at the mandis of the Agricultural Produce Marketing Committee (APMC). However, after the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act, 2020 came into force it allows farmers to sell outside APMC mandis in India.
The Union government has held multiple rounds of talks with farmers and tried to reassure them that their interests will not be compromised. But, no significant progress has been made as yet in breaking the deadlock over the laws.
The protesting farmers and the government are set for another round of talks on December 9.
(With inputs from agencies)