MSP and Swaminathan proposals, the crux of farmers’ tussle with the Centre over MSP - Press - The Print -

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Swaminathan proposals, the crux of farmers’ tussle with the Centre over MSP

Swapna Merlin 22 November, 2017 

A national panel was formed in 2004 under M.S. Swaminathan, which recommended an MSP 50 per cent higher than cost, but Centre refused in 2015.

New Delhi: Two years ago, the Centre dropped the proposal to provide a minimum support price (MSP) 50 per cent higher than the cost of production. But even now, farmers continue to demand the implementation of that recommendation, which was made by the Swaminathan Committee.

Thousands of farmers took to New Delhi’s Parliament Street Monday, seeking a one-time full waiver of loans, and to remind the Centre of its promise to improve their plight.

Suggestions for farmers’ benefit

The recommendations were the product of the national commission on farmers formed in 2004 under the chairmanship of M.S. Swaminathan, the father of the Green Revolution. The committee drafted five reports released in 2004, 2005, and 2006. The reports explored the causes for farmers’ distress, suicides, and contained suggestions to achieve faster and inclusive growth. The topics focused on were land reforms, productivity, credit and insurance, employment etc.

One of the most important recommendations was that “MSP should be at least 50 per cent more than the weighted average cost of production”. This would ensure a fixed ‘take home’ income for the farmer, apart from input costs and expenses.

The BJP had also promised this in its 2014 election manifesto. However, when a PIL was filed in the Supreme Court by the Consortium of Indian Farmers Associations (CIFA) in February 2015 demanding implementation of the national policy on farmers, the Centre filed an affidavit stating that the recommended MSP could not be provided.

“Hence, prescribing an increase of at least 50 per cent on cost may distort the market,” the government had said in the affidavit, which has been accessed by ThePrint.

“A mechanical linkage between MSP and cost of production may be counter-productive in some cases. No comparison can be made about increase or decrease of price of one commodity as compared to other commodities as the same depends on demand and supply and market forces.”

The government added: “It may be noted that pricing policy i.e. the fixing of MSP is not a ‘cost plus’ exercise, though cost is an important determinant of MSP. The pricing policy seeks to achieve the objective of fair and remunerative price and is not an income policy.”

Experts advise fresh look

Now, 13 years since the recommendations were first made, experts say that it is time to take another look at all the policies and laws concerning agriculture.

Vijay Sardana, an agricultural analyst, said: “More options have to be explored with modern concepts to ensure security in agricultural markets and farmers’ income.”

He added that the Swaminathan Committee’s report fails to balance the price gap between the increase in the MSP and the cost of feeding the Indian population, which is highly middle- and lower class.

[60% consumers are also poor and 30% of the population is below poverty line. Parliament instituted Food Security Act to feed them plus subsidies, healthcare, education etc.  Only 3 % population is tax payer and 60% are engaged in agriculture related activities. 

Can 3% tax paying population support subsidy for 60% population. This question should be addressed as well. This resource mobilization dimension is not addressed in Swaminathan Report]

Activists like Yogendra Yadav continue to support the cause of the farmers, urging the Centre to fulfil the committee’s recommendations.

“Farmers need a reasonable income for the investment they make, and that is where Swaminathan Committee’s recommendations are relevant. The entire exercise is not an impossible task,” said Chengal Reddy, chief advisor to CIFA.

“When teachers in government schools earn close to Rs 40,000 per month, why shouldn’t the farmer who feeds the country fight for his income?”