Need 4th law to make buying farm produce below MSP an offence: Bhupinder Singh Hooda
The Centre’s recent legislations to usher in reforms in the farm sector have met with a blowback in several states. Haryana’s former chief minister and current leader of Opposition Bhupinder Singh Hooda spoke to Vinod Sharma about why farmers are angry, the concerns about the laws, and corrective steps needed for an equitable balance in an expanded market. Edited excerpts:
Why is the farming community restive in your state and neighbouring Punjab? What is causing them concern about the framework laid down by the three legislations on the farm sector?
It is inappropriate to say the community is ‘restive’. It’s actually ‘voicing out’ the corrective measures that must be in place to ensure protection for their produce. Farmers should get minimum support price (MSP) based on the Swaminathan Commission’s C2 formula calculated 50% above cost of cultivation (covering labour cost, operational capital, storage, transport, rent of land and incidental expenses). Farmers don’t have the capacity to store their produce for a long time. The idea eventually is to ensure that the farmers should not be facing any logistical pressure.
The freedom to sell agriculture produce outside the notified agriculture produce market committees (APMCs) would expand the marketplace for farm produce with scope for better prices. What then makes the minimum support price (MSP) fixed by the government so indispensable to the farmer?
A correction in the framing and interpretation [of the law] is a must. Here I wish to re-clarify that the Congress manifesto always spoke about rationalising the APMC Act, not removing it. The contract farming rules we made in 2007 were all pro-farmer. Our focus was on basic protection. The rules we devised for contract farming were: one, registration of contract with the district marketing enforcement officer; two, agreed rate/contract will not be less than the MSP of the previous year; three, the buyer shall deposit an amount up to 15% of the price of produce as per MSP or a bank guarantee for the sum (as security) with the committee in which the land is situated ;and four, the security shall be released within 30 days after the satisfactory execution of the agreement between the farmer and private player.
Only such measures can eliminate distress sales by farmers outside APMCs where I have seen tomatoes sold for Re 1 per kg and potatoes for nine paise per kg a few years ago. Such a regime will protect the farmers from exploitation by big business that has deep pockets.
But many agriculture experts see in the new previsions the potential of ushering in a paradigm shift to make farming remunerative rather than it being relief/subsidy oriented.
The positive and negative aspects have to be fairly weighed. It is correct to say that the market for farmers will expand. Yet the expansion may lead to either better prices for farm products or may cause exceptional highs and lows of demand. The equilibrium and security given to farmers through a fixed MSP as part of a rationalised policy is the right idea. It’s the best (option) for the government and the farming community.
What kind of assurances or amendments should be made for a broad consensus on the laws?
Our demand is that the government should bring the fourth Bill stating that the contract agreement (with private buyers) should not be less than the MSP.
Purchase of farm produce at a price less than the MSP should be punishable by law. I am above party politics on the issue as I am the son of a farmer. If they bring the Bill, I will welcome it as it will be for the betterment of farmers. I want them to bring the fourth Bill to safeguard MSP. If they are saying they will give the benefits then where is the glitch in bringing the Bill?
The government made an announcement of increased MSP for six Rabi crops including wheat. Does that not disprove claims that it intends disbanding APMCs and the MSP mechanism?
MSP assurance for some Rabi crops and wheat is not the only thing required. We are talking about India where Kharif crops (bajra, jowar) and rice play an important role in demand and consumption. The MSP mechanism and the Mandi Act as a whole have to be fair and just.
The agriculture sector is subsidised even in developed countries the world over. That makes one doubt your worries. Why would the government fall on its own sword by disbanding MSP or resorting to mechanisms that hurt farmers?
The reality we all are running away from is that the government has been experimenting with delicate areas of concern over the last few years. It they fail, like they have in many other sectors, they will blame destiny, the coronavirus or the Opposition. Let us get real and accept that we are a developing nation where the poor people need essential commodities at extremely low or subsidised prices. Implementing free flow without MSP might raise prices -- and the poor will literally starve. Similarly, the farmer needs to earn in a secure way. The game plan of having corporates enter this sector will harm every state.