In its first major decision after forming the government for a third time, the central government increased the minimum support price - MSP - of 14 kharif crops on Wednesday. But a large number of farmers' organisations and agricultural experts have said that the rise in MSP is meagre. One of the reasons for this consternation is that the increase in MSP is not in proportion to the increase in the input costs. They have pointed out that the MSP
In its first major decision after forming the government for a third time, the central government increased the minimum support price - MSP - of 14 kharif crops on Wednesday.But a large number of farmers' organisations and agricultural experts have said that the rise in MSP is meagre.One of the reasons for this consternation is that the increase in MSP is not in proportion to the increase in the input costs. They have pointed out that the MSP of paddy has increased by 5.35%, while the input costs in growing paddy (Composite Input Price Index) has grown by 6.1%.Ajit Navale, leader of Kisan Sabha has said that the production cost considered for calculating the MSP is much less than the actual cost of production. Let’s examine the details of the crops one by one.PaddyThe increase in the MSP of paddy, the most important and biggest kharif crop, is modest at 5.35%. It is also the crop, whose procurement is highest amongst all the other kharif crops, for which MSP has been declared.Although the government’s paddy procurement is way above its requirement, the MSP for the two varieties of paddy; common and grade A, have been increased by INR117/quintal.This increase in paddy MSP will not be of much use for the farmers from Andhra Pradesh and Chhattisgarh, who were getting INR3,100/quintal as both the state governments had promised to pay bonus over the MSP before the state elections. If these state governments do not extend their bonus scheme, then the farmers will have to settle for the new MSP of INR2,300/quintal. However, the paddy farmers from Punjab, Haryana and Uttar Pradesh will benefit from the hike in paddy MSP. Soyabean and cottonAlong with onion, it was the low prices of soyabean and cotton which contributed to farmers voting against the government in Maharashtra during the Lok Sabha elections. Soyabean and cotton farmers from the state are not happy with the hike in MSP. Maharashtra’s chief minister had demanded an MSP of INR5,300/quintal against last year’s MSP of INR4,600/quintal. The actual increase takes the MSP to INR4,892/quintal.Oil seedsOilseeds like sesamum and groundnut have seen a hike of 7.3% and 6.4% respectively. However, groundnut procurement is limited mostly to Gujarat.The biggest hike of 12.7% is in the MSP of niger seeds, a crop which is on the verge of being forgotten.PulsesThe lowest hike of 1.44% is for moong.As India’s import dependence for pulses shot up significantly last year, especially in tur and urad, the MSP of these two pulses has increased by 7.8% and 6.5% respectively. However, the prices of these two pulses in the open market are much higher than the new MSP.The question of procurementMere announcement of higher MSP without strong procurement does not help farmers much, apart from setting a benchmark price when prices are depressed. Agricultural expert Siraj Hussain said, “Farmers everywhere will benefit higher MSP if their crop is procured.”The unhappiness with the MSP revision is likely to play out in the state elections for Maharashtra, Haryana, Jharkhand and J&K, scheduled for later this year.