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19/12/24 10:23 AM IST

Parliamentary Standing Committee recommendations on MSP

In News
  • A parliamentary committee recently has recommended implementing a legal guarantee on Minimum Support Price, amid a slew of measures to improve farmers’ welfare
  • The committee, chaired by former Punjab Chief Minister Charanjit Singh Channi, has additionally recommended increasing budgetary allocations, compensation for stubble disposal and debt waiver among a slew of measures.
Legal guarantee of Minimum Support Price
  • According to the committee, a legally binding MSP would ensure financial stability for farmers, reduce suicides, mitigate market volatility, alleviate debt burdens, and improve overall mental health among farmers.
  • Implementation of Minimum Support Price (MSP) remains a focal point in the dialogue surrounding agricultural reform and farmers welfare in India. Implementing a legally binding MSP in India is essential not only for safeguarding farmers’ livelihoods, but also for promoting rural economic growth and enhancing national food security.
  • According to the committee, the MSP mechanism aligns with broader national food security objectives by ensuring that foodgrains are available at stable prices, thus aiding public distribution systems.
  • The committee also pointed out that legally guaranteeing MSP would help contribute to long-term food security for the nation by stabilising the production of foodgrains. A legally guaranteed MSP would ensure consistent income for farmers, and allow them to plan better and maintain production without the fear of market fluctuations.
  • The committee has recommended that the department declare a roadmap for legally guaranteeing MSP at the earliest. This would also allow the central government to plan its finances accordingly and subsequently allow a smooth transition.
  • It has also suggested that the department may table a statement in the Parliament after every crop season giving details of the number of farmers who sold their produce at MSP and the existing gap between MSP and actualised market prices crops.
Compensation for disposing of paddy waste
  • The committee has recommended that farmers be compensated for managing and disposing of crop residue, or parali, to prevent them from burning it.
  • The management of paddy stubble has been a major environmental concern, especially during winters when the national capital turns into a fast chamber.
  • The Punjab government has sought a bonus of Rs 2,000 per acre for farmers, offering to match half the grant if the centre covers the rest.
Increasing PM Kisan support
  • The committee has proposed increasing monetary support under the PM-KISAN Samman Nidhi scheme from Rs 6,000 per annum to Rs 12,000 per annum.
  • It also recommended extending seasonal incentives to tenant farmers and farm labourers.
  • Referring to the NABARD Survey on Rural Financial Inclusion for 2022-23, the committee noted that while there had been a 57.6% increase in the average monthly income of rural households between 2016-17 and 2021-22, average monthly expenditure had surged by 69.4% over the same period.
  • This imbalance indicates that while incomes are rising, expenses are outpacing income growth, leading families to borrow more.
Debt waiver to combat farmer distress
  • The committee has recommended introducing a scheme to waive off the debts of farmers and farm labourers to combat the rise in farmer distress and suicides over debt repayment.
  • Citing the NABARD survey, the report said that the percentage of rural families taking loans has risen from 47.4% in 2016-17 to 52% in 2021-22.
  • The proportion of families with outstanding debts has also increased, indicating a heightened financial pressure on these agricultural households.
  • More families now depend on loans to manage expenses, reflecting a concerning trend in rural financial health.
Increasing budgetary allocations
  • The committee highlighted the need to increase the budgetary allocation to agriculture to boost the sector’s growth rate.
  • It has pointed to the continuous decline in the budgetary allocation to agriculture as a percentage of the total central plan.
  • Despite higher absolute allocations from 2021-22 to 2024-25, the percentage share in the total Central plan outlay declined from 3.53% in 2020-21 to 2.54% in 2024-25.
  • For context, agriculture’s growth rate in 2023-24 (provisional estimates) declined to 1.4%, the lowest in the last seven years, compared to the average annual growth rate of 4.18% over the past four years.
Other recommendations
  • The committee suggested implementing compulsory universal crop insurance for smallholder farmers with landholdings of up to 2 acres, modelled after the Pradhan Mantri Jan Arogya Yojana (PM-JAY) health insurance scheme.
  • It has also recommended establishing a National Commission for Minimum Living Wages for Farm Labourers to address their long-pending rights.
  • The committee recommended renaming the Department of Agriculture and Farmers Welfare to the Department of Agriculture, Farmers, and Farm Labourers Welfare to reflect a broader focus on the welfare of agricultural labourers.
Source- Indian Express

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