HIKE IN MSP OF CROPS MUST BE LINKED TO WHOLESALE PRICE INDEX MINIMUM PRICE MUST BE CALCULATED BASED ON PREVIOUS SEASON COST

Union Cabinet in its first meeting of NDA 3.0 has announced new support (MSP) for 14 crops. The hike is very minimal and ranged between five to seven per cent (except for Niger and Ragi) and does not reflect the increased cost of cultivation. Severe losses suffered by BJP in recent fortunes in northern rural heartland indicate that the ruling party is fast losing ground among farming community due to its anti famer policies.

For example, the MSP of paddy, the main kharif crop, has been raised by Rs 117 from Rs 2,183 in 2023 to Rs 2,300 per quintal in 2024. The hike is just 5.3 per cent. For red gram sold at Rs 140 per kilo in retail Kirana shops the farmers will get only Rs 75 per kilogram which is a mere 7.3 per cent rise from the previous rate. Only solace is oil seed crop Niger and millet Ragi with increase of 12.7 per cent and 11.5 per cent respectively.

Though the government boasts of increase of MSPs for pulses and oil seeds so as to promote self reliance
in these crops, in reality the support prices are very minimal except Niger. The new MSPs do not meet even cultivation costs. We imported in 2023 nearly 14 per cent of our consumption that is 46.5 lakh tons of pulses compared to 2.53 million tons in 2022-23. We paid nearly 3.74 billion dollars (1.94 billion dollars in 2022).

In oil seeds too we are having a shortage of 28 percent in terms of consumption. Government has imported 120 lakh tons of palm oil, sunflower and other oils from foreign countries by paying 18 billion dollars. Due to ongoing war in Ukraine and Russia the bill is going to be 20 billion dollars during this year. Instead of  spending huge expenditure on imports our government can pay just half the amount to our farmers by giving
right crop support prices as recommended by M S Swaminathan committee. As most of the pulses, oilseeds are cultivated by poor small farmers in rain fed conditions price increase will relieve them from prevailing rural distress.

Recent Lok Sabha election results clearly reflect that BJP has lost much of its ground in UP, Punjab, Haryana and Rajasthan due to farmers’ discontent over latter’s anti farmer policies. Farmers’ protests starting from Farmers March to Parliament, Nashik to Mumbai Padayatra and the united farmers’ agitation against three farm laws mirror the existing rural distress. Despite the ground reality BJP tried to evade farmers’ demands like legal guarantee for crop MSPs and others in recent polls. Recent post poll survey by CSDS Lokniti revealed that over 61 per cent of farmers voted for  Congress led INDIA alliance, while only 35 per cent farmers voted for BJP.

Government’s claim that they are paying extra 50 per cent cost of production is white lie. Cost of inputs such as DAP, diesel, cotton seeds, transport charges have risen three times between 2014 and 2024. However, agricultural ministry’s CPCA considers 2011-12 as base year for cost of cultivation for calculation of MSPs.
Instead, the government should consider last year’s input costs as basis for calculation of current season MSPs.

Tenants and small farmers’ below 2.4 acres constitute 84 per cent of farmers in this country. Their families toil in fields, making up to 30 per cent of cultivation expenses. But government considers only Rs 125 per quintal as paid out cost. In reality the family labour component amounts to nearly Rs 700 per quintal of paddy production during crop season.

New MSPs should be computed scientifically (C2 +50) taking previous season cost of cultivation as basis. Hike in crop MSPs should be linked to WPI (Whole Sale Price Index). Remove GST on inputs such as fertilizers, pesticides and seeds. Bring a law for guarantee payment of announced MSPs in markets. It is time present NDA 3.0 government read the writing on the wall and start addressing farmer issue to bring relief to distressed farming community.