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13/02/24 06:05 AM IST

Protesting farmers want MSP law

In News
  • With more than 200 farmers’ unions from Punjab gearing up to march to Delhi, the Delhi Police has imposed Section 144 across the national capital for a month.
Price v/s income support
  • Economists largely believe that it is better to give farmers “income”, instead of “price”, support.
  • Price support can be a useful tool for promoting crop diversification.
  • Farmers are more likely to grow pulses, millets, and other nutrient-dense, less water-intensive crops than rice, wheat, or sugarcane if they are assured of MSP on the former.
  • So long as MSPs do not deviate excessively from market rates and inter-crop price parity, it’s the next question that deserves answering.
MSP guarantee
  • There are two conventional ways-
  • The first is to force buyers to pay MSP.
  • Sugar mills are required, by law, to pay cane growers a “fair and remunerative” or “state advised” price within 14 days of purchase. But this approach risks implementation hurdles (recurrent cane payment arrears are proof), or worse, the private trade choosing to not buy at all.
  • The second is for government agencies to buy the entire marketable produce of farmers offered at MSP. That is unsustainable, both physically and fiscally.
  • But there’s a third option: price deficiency payments (PDP).
  • It entails the government not physically purchasing or stocking any crop, and simply paying farmers the difference between the market price and MSP, if the former is lower.
  • Such payment would be on the quantity of crop they sell to the private trade.
Price deficiency payment scheme
  • PDP was tried out first in Madhya Pradesh through a Bhavantar Bhugtan Yojana.
  • Under this scheme, the market price for a crop was its average modal (most-quoted) rate in the Agricultural Produce Market Committee (APMC) mandis of Madhya Pradesh as well as two other growing states during the particular month of sale.
  • The price difference vis-à-vis the MSP was payable on the actual quantity sold by the farmer, backed by an “anubandh patra” (sale agreement with trader), “tol parchi” (weighment slip), and “bhugtan patra” (payment letter signed by both parties).
  • The Madhya Pradesh scheme was implemented during the 2017-18 kharif (post-monsoon) season for eight crops: urad (black gram), soyabean, maize, arhar (pigeon pea), moong (green gram), groundnut, sesame, and nigerseed.
  • But despite 21 lakh-odd farmers registering and payments of about Rs 1,952 crore being made, the scheme couldn’t be continued for lack of Central support.
A model in Haryana
  • Haryana’s PDP scheme, called Bhavantar Bharpai Yojana (BBY), is being implemented mainly in bajra (pearl millet), mustard, and sunflower seed, although technically is also covers groundnut, chana (chickpea), moong, and 16 vegetable and 3 fruit crops.
  • BBY operates on the Haryana government’s ‘Meri Fasal, Mera Byaura’ portal, in which farmers have to register themselves along with details of their land (village name, khasra plot number, holding size, etc) and area sown under different crops.
  • The registration for kharif crops is open from June to August, and that for the rabi (winter-spring) crop from November-February.
  • On grant of registration, post “girdwari” (crop area verification) by revenue/ agriculture department officials and satellite imaging, the farmer is eligible to obtain MSP via BBY.
  • Haryana has opted for a mix of both physical procurement and PDP under BBY.
  • In 2020-21, the state government directly procured 776,909 tonnes of bajra and 16,952 tonnes of sunflower at MSPs of Rs 2,150 and Rs 5,885 per quintal respectively.
Way forward
  • Both Madhya Pradesh and Haryana have demonstrated the feasibility of delivering MSP to farmers at least in some crops other than rice, wheat, and sugarcane.
  • One reason they have been able to do this is because of the already-created APMC mandi infrastructure and systems for farmer registration in these states.
  • This makes it possible to record each transaction — what quantity of any crop a farmer has sold at a certain price — and to pay the difference vis-à-vis the MSP based on that.
  • If a nationwide PDP scheme with 50% Central funding were to be implemented, it can perhaps incentivise other states to follow the examples of Madhya Pradesh and Haryana.
  • They could, for a start, build the market infrastructure and systems that would ultimately enable even their farmers to get MSP, whether by law or otherwise.
Source- Indian Express

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