UP CM’s decision to give MSP for wheat more crucial than loan waiver | opinion | Hindustan Times
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UP CM’s decision to give MSP for wheat more crucial than loan waiver

Although the World Trade Organisation (WTO) too is against giving MSP to farmers, which is calculated as part of the farm subsidy limit that India has exceeded, expanding the procurement system alone holds the key to the transformation of Indian agriculture.

opinion Updated: Apr 06, 2017 12:21 IST
Uttar Pradesh chief minister Yogi Adityanath announcement of the setting up of 5,000 purchase centres to procure 80 lakh tonnes of wheat, against a mere 7.97 lakh tones procured last year, could turn out to be a game changer
Uttar Pradesh chief minister Yogi Adityanath announcement of the setting up of 5,000 purchase centres to procure 80 lakh tonnes of wheat, against a mere 7.97 lakh tones procured last year, could turn out to be a game changer (Hindustan Times )

For years I have seen harried farmers from western parts of Uttar Pradesh carrying truckloads of harvested wheat to nearby Agricultural Produce Market Committee (APMC)-regulated mandis in Haryana. They drive all the way to Haryana’s market yards hoping to sell the harvested wheat at the minimum support price (MSP), an ample indication that the price they were getting in UP was much less.

The absence of regulated market yards has denied UP farmers an assured as well as a higher price for wheat. Still worse, this has been happening year after year. Only 3% of the UP wheat crop was being procured. Which means 97% of the wheat farmers were dependent on the open market, and if the markets were so efficient there would have been no need for a loan waiver.

Because there are hardly a few regulated mandis, farmers are unable to realise the MSP. Denial of a remunerative price is what leads to a debt spiral. So UP chief minister Yogi Adityanath announcement of the setting up of 5,000 purchase centres to procure 80 lakh tonnes of wheat, against a mere 7.97 lakh tones procured last year, could turn out to be a game changer. There is no better way to augment farmers’ income than to provide an assured price as well as an assured market.

More so, at a time when policy directives is towards dismantling APMC-regulated mandis, and in the process deny an assured price by way of MSP to farmers, Yogi Adityanath has to be complimented for refusing to go by the flow. Providing a purchase centre in the near vicinity of farm production areas is the first step needed to reinvigorate farming. Since low incomes are the primary reason for the growing agrarian distress, providing an assured price and ensuring a market for the wheat harvest will act as a shot in the arm for the beleaguered farming community. This has to be followed up with paddy in the coming Kharif marketing season, and subsequently for other crops.

The decision to do provide an addition Rs 10 per quintal over the MSP towards farmers labour, and the commitment to route the price directly to the farmer’s bank accounts has in the process removed the normal irritants that farmers are faced with.

Although the World Trade Organisation (WTO) too is against giving MSP to farmers, which is calculated as part of the farm subsidy limit that India has exceeded, expanding the procurement system alone holds the key to the transformation of Indian agriculture.

According to the Commission for Agricultural Costs and Prices (CACP), there are more than 7,000 APMC regulated mandis in the country. If markets have to be provided in a radius of 5 kms from a village, India needs 42,000 APMC mandis. Such a vast network of mandis alone can ensure a remunerative agriculture and at the same time provide food security at the national as well the household level.

At present, a strong network of mandis exists only in Punjab, Haryana and to some extent in Madhya Pradesh, Maharashtra and Tamil Nadu. That is why it is often said that the procurement system is only functional in two-and-a-half States. If UP takes the lead, and begins by making investments in developing permanent yards for APMC markets, it will emerge as a trendsetter and in fact create a new model for agriculture. This has to be supported by a network of link roads between villages and the mandis.

An economically attractive agriculture is the first step to stop rural to urban migration.

Devinder Sharma is a food policy analyst