Guaranteeing MSP through law is not only necessary to prevent farmer suicides and reduce the impact of inflation but also to conserve water, protect public health, and preserve national wealth.
Jagjit Singh Dallewal
Dec 26, 2024 07:20 IST First published on: Dec 26, 2024 at 07:20 IST
First, it is important to understand what MSP is and when and why it was introduced. The term MSP stands for Minimum Support Price. The term itself reveals much about MSP because “minimum” means the lowest possible, “support” means assistance, and “price” refers to the price that is meant to provide minimal support. This scheme started about 60 years ago when the country was unable to feed its growing population as a safety net for farmers. Its promise was that if their crops didn’t sell in the market, the government would buy them at least at this minimum price. However, at that time, the costs of production for the farmers were not factored in. Instead, the government pushed for increased agricultural production by providing free fertilisers, subsidies, and chemicals. This created a situation where farmers, who were never dependent on the market before, became dependent on it. Traders took advantage of this, and the farmers were exploited. Slowly, the cost of production increased, but the MSP remained far behind. This could be one of the reasons for the rise in farmer suicides. A recent report by a Supreme Court committee revealed that 4,00,000 farmers have committed suicide in the last three decades. However, if we look beyond the records, the number is closer to 7,00,000.
Now, let’s consider the argument by some that farmers in Punjab do not need MSP. The intellectual class and the Punjab government express concern about the depleting groundwater, but no concrete solutions have been offered. It is even cited that it takes 3,000 to 3,500 litres of water to produce just one kilogram of rice. This information has been repeated so much that people are fed up. Some claim that the groundwater will only last for another 15 to 20 years for drinking purposes. Therefore, farmer unions have started demanding a guaranteed MSP law for 23 crops, hoping it will lead to the promotion of crop diversification. With guaranteed MSP for these 23 crops, farmers in Punjab and Haryana will be encouraged to grow crops that provide better profits than wheat and paddy. This will not only address the groundwater issue but also offer a permanent solution to the problem.
In addition to the MSP guarantee law, promoting crop diversification will significantly reduce electricity consumption in agriculture, potentially cutting it by 60 per cent. This will allow for cheaper electricity for household consumers in Punjab. Furthermore, it will help save groundwater, which is crucial for everyone, including farmers, workers, officials, and citizens. Moreover, the country will save its foreign exchange by reducing the need to import oil and pulses, as India spends nearly Rs 2 lakh crore annually on these imports.
Punjab, on the other hand, is capable of producing not just oilseeds and pulses but a wide variety of crops that can make the country self-sufficient. This has already been proven as Punjab’s farmers have helped the country overcome food shortages in the past. If the money spent on MSP guarantees were invested wisely, it could ensure a better life for farmers and contribute to the nation’s development.
Apart from this, some economists and intellectuals suggest that the amount needed to guarantee MSP for crops would be much lower than the sum India spends on oil and pulses imports. Experts have even stated that MSP can be guaranteed for crops with just Rs 20,000 to Rs 50,000 crore. This amount would be a small price to pay compared to the benefits of ensuring a stable agricultural system and reducing the country’s dependency on foreign goods.
Furthermore, guaranteeing MSP will help address the growing concerns about health hazards. Reports suggest that palm oil, commonly used in many food products, is processed using dangerous chemicals, which can lead to health issues. Therefore, guaranteeing MSP would not only protect the livelihood of farmers but also safeguard public health and the country’s wealth.
The government continues to claim that it is providing MSP to farmers, but in states like Bihar and Uttar Pradesh, despite the MSP for paddy being set at Rs 2,325 per quintal, farmers are forced to sell it at prices as low as Rs 1,000 to Rs 1,400 per quintal. Similarly, in Rajasthan, the government places a cap on how much paddy is bought above the MSP, forcing farmers to sell the remaining crop at much lower prices.
This is not just a problem in Rajasthan; similar issues exist in Haryana, Madhya Pradesh, and other states. Reports from the Organisation for Economic Co-operation and Development (OECD) have shown that by offering farmers Market Price Support (MPS) that is lower than the required rate, the government has effectively caused a loss of nearly Rs 60 lakh crore to farmers.
This situation is a major cause of farmer suicides. The OECD report reveals that in 2023 alone, the country lost Rs 14.72 lakh crore due to the low rates offered to farmers under MSP. This ongoing financial loss has led to farmers being heavily indebted.
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The fact remains that the real reason behind the rising debt among farmers is the failure to offer them a fair MSP. It is essential for the government to guarantee MSP for crops in order to prevent further harm to the agricultural sector and reduce the growing distress among farmers.
Guaranteeing MSP through law is not only necessary to prevent farmer suicides and reduce the impact of inflation but also to conserve water, protect public health, and preserve national wealth. The government must take urgent action in this regard.
The writer is coordinator of Samyukt Kisan Morcha (non-political). He is on a hunger strike demanding legal guarantee for MSP
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