Centre dangles MSP bait, but farmers won't bite

On Sunday night, government representatives had proposed five-year contracts with farmers to buy pulses, maize, and cotton from farmers at the minimum support price (MSP). However, farmers who have demanded legally guaranteed MSP for all crops, a loan waiver, social security benefits and a revamp of the crop insurance scheme, were not impressed.

Farmer leaders said the proposal was not in their interest, adding they want legal MSP guarantee for all 23 crops, not just pulses, maize, and cotton. Farmers are led by two umbrella bodies—Samyukta Kisan Morcha (SKM) and Kisan Mazdoor Morcha (KMM)—representing 200 farm unions.

“If the government takes care of assured procurement of only five-six crops at MSP, it is not fair to growers who cultivate other crops. The government can easily divide its fund of ₹1.75 trillion to ensure a legal MSP guarantee for all 23 crops, instead of spending it to import edible oils, especially palm oil, which affects human health. I don’t see any burden here," SKM leader Jagjit Singh Dallewal told reporters.

“Also, the government talked about crop diversification. If that’s the case, farmers who are switching to pulses from paddy will have assured purchase of their crops at MSP. For farmers who are traditionally cultivating pulses, their produce may not have an MSP-assured procurement. This is not in favour of farmers. Hence, we have decided to reject the government’s proposal on MSP," Dallewal said, adding the “Delhi Chalo" march will resume on 21 February.

MSP is a price fixed by the government to protect farmers from any steep fall in crop prices. This guarantee acts as a safety net and prevents losses for farmers. The latest government proposal was made at the fourth round of talks with farmer representatives by three union ministers—Piyush Goyal, Arjun Munda, and Nityanand Rai.

“Guaranteeing MSP for all crops can lead to farmers moving to crops other than paddy and wheat, which see the maximum procurement," said Pushan Sharma, director of research, Crisil Market Intelligence & Analytics.

“Another critical aspect to consider is that procurement is concentrated in only a few states such as Punjab, Haryana, Madhya Pradesh, Chhattisgarh, Telangana, and Uttar Pradesh, so farmers in other states don’t get the benefit of MSP," added Sharma. “Guaranteeing an MSP across crops will spread the benefit across the country. It will support farmers’ incomes and boost consumption demand."

The latest round of farmers’ protest follows muted farm earnings over the past year, during which the government placed export curbs on wheat, rice, sugar and onion, depressing local prices. Farm incomes were hit also because of repeated climate shocks such as heatwaves and uneven rains.

On the sixth day of their march on Monday, the farmers stayed put at the Shambhu and Khanauri points of the Punjab-Haryana border.

“The way farmers were treated at the (Shambhu) border is condemnable. The main reason for inviting Punjab CM Bhagwant Mann to the meetings was to raise the issue of barricading along the borders, and that people of his state (Punjab) are facing tear gas shelling from the neighbouring state. He promised to take notice of the situation, but didn’t. He should have put this issue in front of ministers. And today, Haryana DGP in his statement said they did not use pellet guns and tear gas; we request Supreme Court to take suo moto cognizance against those who have done this act," Dallewal further said.