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Currently, the Centre announces MSPs for 25 crops but due to insignificant procurement by government agencies, market prices of most pulses and oilseeds are often below support prices.
Currently, the Centre announces MSPs for 25 crops but due to insignificant procurement by government agencies, market prices of most pulses and oilseeds are often below support prices.

Farmer bodies announce public audit of MSP system

From 14 March the farmer organisations will carry out a public consultation and audit of the MSP system in mandis in eight states and raise the demand to make MSPs a legal entitlement for farmers

New Delhi: Holding the government accountable for its budget promise of ensuring minimum support prices (MSP) to farmers, a host of farmer organisations on Wednesday flagged that the winter harvest of gram, lentils and mustard, which has started arriving in wholesale markets, is selling at rates significantly lower than announced support prices.

The farmer organisations including Jai Kisan Andolan, Ryathu Joint Action Committee-Telangana, Kisan Sangharsh Samiti-Madhya Pradesh, and National Alliance for Peoples Movement also announced that beginning 14 March, they will carry out a public consultation and audit of the MSP system in mandis (wholesale markets) in eight states, and raise the demand to make MSPs a legal entitlement for farmers.

Currently, the Centre announces MSPs for 25 crops but due to insignificant procurement by government agencies, market prices of most pulses and oilseeds are often below support prices.

Citing government data reported by registered markets on the Agmarknet portal, the farmer organisations said that against MSP of Rs4,400 per quintal for chana (gram), average wholesale prices range between Rs3,458 and Rs3,766 per quintal in states like Madhya Pradesh, Maharashtra and Karnataka.

For masur (lentils), the data shows that against an MSP of Rs4,250 per quintal, average wholesale prices are Rs3,249 in Madhya Pradesh and Rs3,866 in Uttar Pradesh. Similarly, for mustard, average wholesale prices are between Rs3,463 and Rs3,517 in states like Madhya Pradesh, Rajasthan, Uttar Pradesh and Haryana while the MSP is fixed at Rs4,000 per quintal.

“In the budget, the finance minister promised that the government will ensure that farmers benefit from MSP announcements but not only are wholesale prices lower than declared MSPs, they are even lower than the prices prevailing last year," said Yogendra Yadav, member of All India Kisan Sangharsh Coordination Committee (AIKSCC) and president of the political party Swaraj Abhiyan.

Yadav, who was instrumental in putting together AIKSCC, a coalition of over 180 farmer organisations demanding fair crop prices and loan waivers, added that despite plunging chana prices following a record crop, the government allowed imports and only recently (in February) raised import duties (to 60%).

“The government is yet to announce the mechanism by which it will ensure farmers benefit from MSP announcements... in states like Maharashtra where production of chana is estimated at 1.9 million tonnes, the government is procuring just 0.4 million tonnes, which will not be able to lift wholesale prices for farmers," Yadav said.

Following consecutive years (2016-17 and 2017-18) of record harvests, low crop prices, and protests by farmers, finance minister Arun Jaitley announced in the budget last month that the government will “put in place a foolproof mechanism so that farmers get an adequate price for their produce".

In the budget, Jaitley had also promised to fix MSP at 50% return over costs of production, but farmer organisations have objected to the definition of cost proposed by the government, saying it underestimates the true cost of cultivation incurred by farmers.

“The past few seasons have witnessed a problem of plenty: farm revenues declining for a number of crops despite increasing production and market prices falling below the minimum support price (MSP)," the Economic Survey (2017-18) released in January said.

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