Updated: September 25, 2020 9:38:15 am
A wheat field in Punjab. Wheat is one of 23 agricultural products for which the Center currently sets PMS. (Express photo: Jasbir Malhi)
The recently enacted law dismantling the APMC (agricultural produce market committee) mandis monopoly, thus allowing the sale and purchase of crops outside of these state government regulated market yards, may not have faced serious opposition from farmers. If it had included a provision that would safeguard the continuity of the current procurement regime based on the minimum support price (MSP).
A simple ruling, in the sense that nothing in this Law will prevent the government from announcing MSP and undertaking crop purchases at these rates as before, could have mitigated any criticism that the new law is “anti-farmer”.
What does the law say about MSP?
The Draft Law on Trade and Commerce of Agricultural Products (Promotion and Facilitation) does not grant any legal support to the MSP. Forget making it a legal right, there is not even a mention of “MSP” or “hiring” in the bill passed by both Houses of Parliament last week.
Agriculture Minister Narendra Singh Tomar has said that the new legislation has “nothing to do with MSP”. Instead, their goal is simply to give farmers and traders the freedom of choice to sell and buy agricultural products outside of APMC mandis facilities. The MSP and hiring, according to him, are completely separate issues: “The MSP was not part of any law before. Nor is it part of any law today. “
The minister is not wrong.
The National Food Safety Act of 2013 (NFSA), passed by the previous UPA government led by Congress, provides a legal basis for the public distribution system (PDS) that previously operated only as a regular government scheme. a right that entitles everyone belonging to a “priority household” to receive 5 kg of food grains per month at a subsidized price not to exceed Rs 2 / kg of wheat and Rs 3 / kg of rice. Priority households were defined in more detail to cover up to 75% of the country’s rural population and 50% in urban areas.
MSP, on the other hand, lacks legal backing. Access to it, unlike grains subsidized through the PDS, is not a right for farmers. They cannot demand it as a matter of law.
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Members of various farmers’ organizations on their way to organize a protest against the central government for ordinances related to agriculture, in Patiala, on Thursday, September 17, 2020. (Photo PTI)
So what is the basis of the MSP?
“It is just a government policy that is part of administrative decision making. The government declares MSP for crops, but there is no law that orders its implementation ”, explained Abhijit Sen, former member of the Planning Commission and president of the Commission on Agricultural Prices and Costs (CACP).
Currently, the Center sets PEM for 23 agricultural products: 7 cereals (rice, wheat, corn, bajra, jowar, ragi and barley), 5 legumes (chana, arhar / tur, urad, moong and masur), 7 oilseeds (rapeseed -mustard). , peanuts, soybeans, sunflower, sesame, safflower and nigerseed) and 4 commercial crops (cotton, sugar cane, copra and raw jute), according to CACP recommendations.
But the CACP itself is not a statutory body created by an act of Parliament. This, despite the fact that it was born in 1965 and MSPs were announced from the time of the Green Revolution, starting with wheat in 1966-67. The CACP, as its website indicates, is simply “an attached office of the Ministry of Agriculture and Agricultural Welfare of the Government of India”. You can recommend MSP, but the decision to fix (or even not fix) and enforce the law ultimately rests with the government.
“The government can make acquisitions in MSPs if it so wishes. There is no legal coercion. Nor can it force others (private traders, organized retailers, processors or exporters) to pay, ”Sen said. The government buys wheat and rice in its MSPs. But that’s more due to political compulsion and the need to satisfy the PDS food grain requirements, even more so the NFSA publishes.
The only crop in which the payment of the MSP has any legal element is sugar cane. This is because its price is governed by the 1966 Sugarcane (Control) Order issued under the Law of Essential Commodities. This order, in turn, provides for the setting of a “fair and remunerative price” (PRF) for cane during each sugar year (October-September). But even the FRP, which, incidentally, was called until 2008-09 “legal minimum price” or SMP, is not payable by the government. The responsibility to make the FRP payment to the farmers within 14 days after the purchase of the cane rests solely with the sugar mills.
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Punjab farmers protest against the three agrarian bills. The ongoing farmer protests essentially reflect a loss of that same confidence. (Photo / File Express)
Has there been any measure to give legislative backing to the MSP?
The CACP, in its price policy report for the 2018-19 kharif marketing season, had suggested the enactment of legislation giving farmers ‘The right to sell in MSP’. This, he considered, was necessary “to instill confidence among farmers to purchase their products.” That advice, unsurprisingly, was not accepted.
the farmers protests ongoing they essentially reflect a loss of that same confidence. Is the dismantling of APMC mandis’ monopoly in the wholesale of agricultural products the first step towards ending even the current MSP-based takeover program, which is largely confined to wheat and rice? If CMPA were to become unviable due to businesses relocating abroad, how will government agencies carry out the acquisitions that now take place in mandis?
These questions are playing on the minds of farmers, particularly in states like Punjab, Haryana and MP that have well-established MSP government procurement systems. For them, the freedom to sell to anyone, anywhere, anytime is of little value compared to the convenience of secured acquisition at MSP.
What has the government done to address these questions?
Prime Minister Narendra Modi, on September 20, tweeted that “the MSP system will continue” and “public procurement will continue.” The Minister of Agriculture has also pointed out that previous governments never thought it necessary to introduce a law for the MSP. So why even talk about MSP, stop incorporating guarantees regarding its continuity, in an apparently unrelated law?
It remains to be seen if these finer points would look good on the ground. By announcing the rabi crop MSPs for the following planting season on September 21 (this was done last year on October 23) and launching the kharif acquisition early next month, the government can hope to counter any backlash from farmers.
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