Photo: Mint
Photo: Mint

MSP sustains the illusion that farmers rule in this country

A partial hike in the MSP on paper was packaged by the govt as three fresh and historic steps for farmers' welfare

Minimum support price (MSP) is a fiction. It is a feel-good fiction. The farmers are free to sell their crop for as much as they wish, but should the prices fall below a minimum level, the government is there to help them.

MSP is a sovereign guarantee that the state shall step in as a buyer of the last resort so that farmers get fair returns for their hard work. Or so goes this fiction of a welfare state.

Its fictional status is official. The Shanta Kumar committee to review the functioning of the Food Corporation of India (FCI) had found that only 6% farmers benefit from the MSP.

Parliament’s standing committee on agriculture routinely acknowledges and ritually regrets the inability of the vast majority of farmers to realize MSP equivalent prices.

So do the reports of the Commission for Agricultural Costs and Prices (CACP). Every official knows that the MSP is the maximum price the farmers can aspire for.

The fiction gained more buyers this season, thanks to the grand publicity unleashed by the Modi government. A partial hike in the MSP on paper was packaged as three fresh and historic steps for farmers’ welfare.

First, the finance minister’s budget speech announced it as a policy decision.

Second, the government followed it up with announcing the MSP for the kharif season.

Third, the government tweaked the procurement policy and re-christened it as PM-AASHA (Pradhan Mantri Annadata Aay Sanrakshan Abhiyan). Everyone was so exhausted celebrating the historic gains for the farmers that no one had the time to check whether all these paper announcements made a difference to the prices farmers get on the ground. The power of fiction is its ability to get us to suspend disbelief.

For the less incredulous, it’s not hard to bust the lie that is MSP. Just go to the official AgMarknet website and click on National Bulletin under “prices and arrivals" (bit.ly/2DpWL14), choose the report on Market Prices below MSP and then select a commodity and period for a glimpse of the true prices the farmers get.

Ask a friend who knows agriculture markets and he will tell you that the official rates recorded at AgMarknet are much above the real modal price in the mandi. Never mind that.

Just calculate the difference between the official MSP and the actual price realized by the farmers.

We carried that exercise recently and found that on an average the farmers were selling for anywhere between 500 (for cereals) and 2,000 (for dals) per quintal below the MSP.

In sum, the farmers had already lost around 1,150 crore in the first three weeks of the marketing season as they were forced to sell below the MSP.

Yet it is a convenient fiction. Its feel-good effect serves to postpone (infinitely) our encounter with the bitter truth of agrarian distress.

It helps us perpetuate the illusions that slowly but steadily all farmers are about to come under the protective umbrella of remunerative prices.

It helps us turn our back to the harsh truth of rural indebtedness, of forced migration, of the statistics of farmers’ suicide.

MSP is a necessary fiction in a democracy. It sustains the illusion that popular majority—farmers in our case—rules this country.

Yogendra Yadav is member of Jai Kisan Andolan, a farmer’s movement, and president of Swaraj India.

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