Centre has not ruled out a law to guarantee MSP, hints Narendra Singh Tomar
Agriculture minister Narendra Singh Tomar on Thursday said he could neither say yes nor no to the demand by farmers for a law to guarantee minimum support prices (MSPs), hinting for the first time that the Union government is not ruling out such a possibility.
“Abhi mein iske baare me haan bhi nehin keh sakta aur naa bhi nehin keh sakta (At this point, I can neither say yes nor no on this),” the farm minister said in an interview with HT at his office, when asked if the government would even consider the demand.
Farmers’ representatives in their November 13 meeting with the farm minister and food minister Piyush Goyal demanded a repeal of three farm laws or amending them to outlaw the sale of farm commodities below federally fixed MSPs.
“The recent laws have a different mandate. They are in the interest of farmers. They deal with marketing and contract farming, etc. MSP is outside their scope,” Tomar said.
Farmers from Punjab, Haryana and other states are protesting a set of laws approved by Parliament in September to open up agricultural markets in the country, throwing a political challenge to the Narendra Modi government.
On Thursday, police detained hundreds of farmers in Haryana and security on the Delhi-Haryana border was tightened to stop cultivators from entering the national capital, where they plan to hold rallies.
The government has defended the recent reforms, saying these changes will bring big buyers, supermarkets and exporters to farmers’ doorstep. Farm unions, however, say the new rules could pave the way for the government to stop buying grains at guaranteed prices, leaving them at the mercy of private buyers. The government, on the other hand, has insisted it will still purchase staples at guaranteed prices.
Tomar said the Modi government had increased the MSP of rice by 43% between 2013-14 and 2020-21. He also said payments made to farmers for paddy procurement had doubled under the National Democratic Alliance government compared to those under the previous United Progressive Alliance government. Total MSP value paid to farmers for paddy had gone up to Rs 4.34 lakh crore during 2014-19, up from Rs 2.88 lakh crore paid during 2009-14, he said.
“So, our commitment to MSP is clear. The procurement system will continue,” the minister added.
“I want to appeal to our farmer brothers. We are ready to talk about all issues and resolve differences. That is why I have invited them again for talks on December 3.”
The government fixes MSP for 23 crops, but buys mostly grains from farmers at these prices. This tends to benefit staple growers. For most other items, farmers get what markets dictate.
Experts say a law barring sale of farm produce below MSP makes little economic sense. “If it is not profitable to buy at MSP, say, when demand is low, then the private sector will simply exit the mandi (markets). On the other hand, it is not possible for the government to buy everything at MSP,” said Pravesh Sharma, a fellow at New Delhi’s Indian Council for Research on International Economic Relations.
“Support to farmers is not in question. But support in the form of MSP, which is market-distorting, raises questions, such as ‘whether can we move to other ways of supporting farmers that cause less collateral damage,” Sharma said.
Analysts also say higher MSPs or procurement could raise greater scrutiny of India at the World Trade Organisation (WTO). WTO rules cap government procurement for subsidized food programmes by developing countries at 10% of the total value of agricultural production based on 1986-88 prices in dollar terms.
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