Farmers Protest 2.0: Farmers Reject Centre's Proposal to Procure Five Crops at MSP | Delhi Chalo

Farmers rejected the central government's new plan for the Minimum Support Price (MSP) for crops, saying it was not in their interest. After rejecting the government's proposal, the protesting farmers said they will resume their 'Delhi Chalo' march on the morning of February 21. Farmer leaders said the proposal did not have clarity and they want MSP on all 23 crops and not just pulses, maize, and cotton crop.

Delhi Chalo Samyukta Kisan Morcha (Non-Political) leader Jagjit Singh Dallewal made an appeal to the government to either meet the demands raised by the farmers or allow them to protest peacefully in Delhi. He also urged all protesting farmers not to indulge in violence. He said the government's proposal will only benefit farmers who rotate from rice grains to pulses between the crop cycles. On Monday, Dallewal said the central government imports palm oil at the cost of Rs 1.75 lakh crore. If this amount is earmarked for oilseeds cultivated by the farmers, it would benefit them, he added. The farmer leader added that there are no meetings with the government planned at the moment but they are always ready for talks.

1. Farmer's Protest:

• Farmers from Punjab, Haryana, and Uttar Pradesh are marching to Delhi in the 'Delhi Chalo' protest.
• They demand legal guarantees for the Minimum Support Price (MSP).
• In 2020, farmers protested against three farm laws, leading to their repeal in 2021.

2. Key Demands of Farmers:

• Guarantee MSP for all crops.
• Determine crop prices based on Dr M S Swaminathan Commission’s report (C2+ 50% formula).
• Full debt waiver for farmers.
• Implement Land Acquisition Act of 2013.
• Punishment for October 2021 Lakhimpur Kheri killings.
• Withdraw from WTO and freeze FTAs.
• Pensions for farmers and farm laborers.
• Scrapping of Electricity Amendment Bill 2020.
• Increase MGNREGA employment to 200 days, daily wage of Rs 700, linked with farming.
• Strict penalties for fake seeds, pesticides; improve seed quality.
• National commission for spices.
• Ensure rights of indigenous peoples over water, forests, and land.

3. Government’s Response:

• After repealing farm laws, the Indian Government formed a committee on MSP in 2021.
• In July 2022, a new committee with agriculture, rural, and animal husbandry ministries' representatives was proposed.
• The new committee would address farmers' demand for MSP.

4. Challenges with MSP Legalisation:

• Forced Procurement: May lead to overproduction and storage problems.
• Discrimination Among Farmers: Could create disparities between supported and unsupported crops.
• Pressure From Traders: Private traders resist legal MSP.
• Financial Burden: Government might face financial strain.

5. Initiatives to Protect Farmer Income:

• Direct cash transfers, expanding PM KISAN Scheme.
• Insurance schemes for income loss.
• Subsidies and grants for agricultural support.
• Price-difference payment option.
• Implementing schemes like Bhavantar Bharpai Yojana.

6. Concerns Related to WTO and FTAs:

• Farmers fear increased competition and cheaper imports.
• FTAs and WTO seen as favoring multinational corporations.
• Imported goods flood domestic market, impacting local prices.
• Imposition of foreign regulations on farming practices.

7. Current State of MSP and Farmers Demand:

• MSP for wheat in Rabi Marketing Season 2024-25 is higher than C2 plus 50%.
• CACP recommends MSP based on A2+FL formula.
• Farmers demand MSP based on C2 plus 50% formula.
• Return over cost for wheat in Punjab is 51.36% over C2.

What is Minimum Support Price (MSP)?

MSP is the guaranteed amount paid to farmers when the government buys their crops. It is determined based on the recommendations of the Commission for Agricultural Costs and Prices (CACP). CACP, an office under the Ministry of Agriculture and Farmers Welfare since January 1965, proposes MSP by considering factors like production cost, demand and supply, market trends, and inter-crop price parity. The final approval on MSP levels comes from the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.

Crops Under MSP:

CACP suggests MSP for 22 mandated crops and fair and remunerative price (FRP) for sugarcane. Mandated crops include 14 kharif crops, 6 rabi crops, and 2 commercial crops.

Production Cost Categories:

• ‘A2’: Encompasses all direct expenses like seeds, fertilizers, pesticides, labor, leased land,fuel, and irrigation.
• ‘A2+FL’: Adds an imputed value of unpaid family labor to 'A2'.
• ‘C2’: A more comprehensive cost considering rentals and interest for owned land and fixed capital assets, added to 'A2+FL'.

CACP considers both 'A2+FL' and 'C2' costs when recommending MSP. 'C2' is primarily a benchmark reference for opportunity costs in major producing states.

Need for MSP:

The twin droughts of 2014 and 2015, coupled with economic shocks like demonetization, GST rollout, and subsequent economic slowdowns, led to declining commodity prices, affecting farmers. Higher input costs further added to farmers' challenges. MSP ensures fair prices for crops, reducing farm distress and poverty, especially in states heavily dependent on agriculture.

Concerns Regarding MSP in India:

1. Limited Extent:
   • MSP is officially announced for 23 crops, but in practice, only rice and wheat are extensively procured and distributed under the National Food Security Act (NFSA).
   • Implementation for non-target crops is ad-hoc, leaving the majority of farmers growing these crops without MSP benefits.
2. Ineffective Implementation:
   • Shanta Kumar Committee's 2015 report revealed only 6% of MSP actually reaches farmers.
   • Inadequate procurement mechanisms and limited market access contribute to this inefficiency.
3. Skewed Crop Dominance:
   • Focus on MSP for rice and wheat leads to a skewed cropping pattern, impacting ecology, economy, and nutrition.
   • This may not align with market demands, limiting income potential for farmers.
4. Middlemen Dependency:
   • MSP-based procurement often involves middlemen, commission agents, and APMC officials.
   • Smaller farmers struggle to access these channels, leading to inefficiencies and reduced benefits.
5. Burden on Government:
   • Government shoulders a significant financial burden in procuring and maintaining buffer stocks of MSP-supported crops.
   • This diverts resources from other potential agricultural or rural development programs.

Way Forward:

To address concerns, the government can gradually expand the list of crops eligible for MSP support, encouraging crop diversification. Balancing the interests of farmers and broader economic implications is crucial. Revisiting MSP calculation methodology and ensuring a fair, transparent process could mitigate farmer concerns.

Reasons for Farmers' Protests Across the Globe:

South America:

• Brazil:
  • Protests against unfair competition from genetically modified maize.
• Venezuela:
  • Farmers seek access to subsidized diesel.
• Colombia:
  • Rice growers demand higher prices due to economic downturns, droughts, and crop damage.

Europe:

• France:
  • Protests against low-cost imports, insufficient subsidies, and high production costs.

North and Central America:

• Mexico:
  • Farmers protest poor prices for corn and wheat.
• Costa Rica:
  • Farmers seek more government assistance to alleviate industry debt.
• Mexico's Chihuahua Province:
  • Protests over plans to export limited water supplies to the United States.

Asia:

• India:
  • Farmers protest for guaranteed crop prices, income doubling, and loan waivers.
• Nepal:
  • Protests due to unfair prices for imported Indian vegetables.
• Malaysia:
  • Farmers protest against low rice prices.
• Nepal:
  • Farmers protest against low sugarcane prices.

Oceania:

• New Zealand:
  • Farmers protest against government regulations affecting food producers.
• Australia:
  • Farmers oppose high-voltage power lines passing through their land.

Common Global Factors:

• Unfavorable Exchange Rates:
  • Farmers worldwide face challenges due to unfavorable exchange rates for exports.
• High Taxes:
  • Many protests are driven by high taxes impacting farmers' profitability.
• Economic Downturns:
  • Economic downturns contribute to lower crop prices and financial strain.
• Natural Disasters:
  • Droughts and other natural disasters damage crops, reducing agricultural output.

Farmers across the globe protest against a range of issues including economic challenges, unfair competition, insufficient subsidies, and unfavorable government policies. These protests highlight the shared struggles faced by farmers worldwide and the need for addressing their concerns at a global level.