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Issue:January' 2018

AGRARIAN DISTRESS

Lip service to farmers

Malladi Rama Rao

Kisan Mukti March

In recent weeks, sections of the political class and farmers groups have been agitating for implementation of the Swaminathan Committee’s recommendation that calls for a substantial hike in Minimum Support Price (MSC) for food crops. The Swaminathan committee, as the National Commission for Farmers' headed by noted agronomist M S Swaminathan is called, was appointed during the UPA regime at the height of farmers’ suicides in Vidarbha.
It said the MSP should be total costs plus 50 per cent. The UPA treated the recommendation as a PUC – paper under consideration.
The Modi government has been claiming that it has fixed MSP at 50 per cent above the cost of production. There are no takers for its claim though. Reason? The flaw in its methodology. Fifty years since the Green Revolution, Indian agriculture remains in the crisis mode.
For the Kharif MSP, the Modi government has added input costs (expenditure on seeds, manure, chemicals, fuel, and irrigation and hired labour costs) and the estimated cost of labour put in by a farmer family, and then added 50 per cent of this value to arrive at the remunerative price that can be offered. This is not what Swaminathan had advised. He wanted the government to to add land rent and the cost of interest on the money borrowed for farming as well, since small and marginal farmers and landless farmers account for bulk of the tillers.

M.S. Swaminathan On their part what the farmers are asking is a support price that takes into account the cost of inputs plus rental value of owned/leased land plus family labour and the interest on the value of fixed assets. This the Modi government is unwilling to do. For reasons only Modi’s egg heads know. The government is also reluctant to appreciate another ground reality that farmers across the country are still dependent on local money lenders who charge exorbitant interest.
So, farmers hit the streets and staged ‘Kisan Mukti March’ in the national capital for the second time in 2018. More than 200 farmers’ organisations took part in the latest march on 30th Novermbet under the banner of All India Kisan Sangharsh Coordination Committee (AIKSCC). Besides a remunerative minimum price guaranteed as their right, farmers want the government to push through Parliament Freedom from Debt Bill, which will provide immediate crop loan waiver to indebted farmers.
It is pertinent to ask whether acceptance of Swaminathan recommendation in toto will offer manna to farmers. The answer is a resounding no. There is no uniform cost of production in India due to factors like diversified agro-climate conditions.So much so offering to per cent profit over and above the cost of production will discourage efficiency and prompt fudging which in turn is a sure invitation to destroy the whole farm economy.
Instead of this short-sighted discourse, it is time we worked on making Indian agriculture globally competitive and profitable to farmers.

Farmers hit the streets and staged ‘Kisan Mukti March’ in the national capital for the second time in 2018. More than 200 farmers’ organisations took part in the latest march on 30th Novermbet under the banner of All India Kisan Sangharsh Coordination Committee (AIKSCC). Besides a remunerative minimum price guaranteed as their right, farmers want the government to push through Parliament Freedom from Debt Bill, which will provide immediate crop loan waiver to indebted farmers.

In the near term, however, the government will do well to take a relook at the working of the Commission for Agriculture Costs and Prices (CACP) that formally recommends the MSP. The Commission was established in 1965 as the Agriculture Prices Commission, and two decades later it became CACP. It is supposed to be a five-member body. But the present government has not filled the two posts meant to give representation to farming community. There is no explanation as to why farmers voice is shut out.
As of now, the MSP covers 23 commodities – seven cereals, five pulses, seven oil seeds, and four commercial crops. Right from the Day One, the MSP formula suffered from a major flaw. And it is the government’s worry about the MSP’s effect on cost of living and general price level.
Higher MSP would naturally translate into higher issue price at the ration shop level. And higher issue price would mean annoying the consumers, particularly the vocal middle class which is the most pampered lot in the country. So lip service to the farmer and fair price to urban consumer became the order of the day in India long before the country embraced liberalisation under Manmohanomics.
Compounding the problem is the tendency of the Mint Street to address inflation – price rise as a monetary problem while in reality it is a fall–out of no more than demand- supply mismatch.
Inflation in the Indian context demands walking the extra mile to flood the market with the commodity in short supply and not curbing money supply. Sadly, in our competitive politics, loan waiver is a good talking point and not the root of the problem.
Paradox? Yes, well it is.Because only 10 per cent of the country’s farmers benefit from MSP and the rest 90 per cent bulk of them small and marginal farmers are at the mercy of the money lender- trader nexus, going by the study of the National Sample Survey Organisation (NSSO).