{"id":75967,"date":"2021-01-08T19:00:59","date_gmt":"2021-01-08T13:30:59","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=75967"},"modified":"2021-03-26T15:54:01","modified_gmt":"2021-03-26T10:24:01","slug":"contradictions-between-farm-laws-and-the-msp-system","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/contradictions-between-farm-laws-and-the-msp-system\/","title":{"rendered":"Contradictions between farm laws and the MSP system"},"content":{"rendered":"<p><span style=\"font-family: georgia, palatino, serif;\"><em><span style=\"color: #800000;\"><b>This article has been created based on the Indian Express article \u201cMisunderstanding the MSP\u201d\u00a0<\/b>\u00a0<\/span><\/em><\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\"><b>Synopsis-\u00a0<\/b>Mere amendments to farm laws will not solve the MSP issue, as the MSP system may not be able to face the private system of farm laws.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\"><b>Syllabus<\/b><b>&#8211; GS<\/b><b>\u00a0Paper III<\/b>\u00a0(Issues related to direct and indirect farm subsidies and minimum support prices)<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\"><b>Introduction-\u00a0<\/b>Recent negotiations between the farmers\u2019\u00a0organisations and the Centre are stuck on the issue of MSP and repeal of farm laws. Although the government offered an amendment to address flaws in the three farming laws.\u00a0 But the farmers demanding, laws themselves need to be repealed.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt;\"><b>Understanding the aspects related to the MSP system <\/b>\u00a0<\/span><\/p>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\"><b>MSP Package:<\/b>\u00a0MSP alone is not remunerative for farmers. Remuneration is facilitated by a combination of\u00a0<b>1.<\/b>MSP<b>, 2<\/b>. Public Procurement System (PPS) and\u00a0<b>3.<\/b>\u00a0Strict time-bound purchase of output brought to the PPS (By APMC, mandi yards).\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"1\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\">If any one of the above factors is missing from the combination, farmers will not be able to get the intended benefits.\u00a0\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\">For example; Gaurang Sahay of the TISS, Mumbai reported that in MP,<b> the absence of timely purchase of vegetables led to farmers feeding cauliflower and\u00a0<\/b><b>aubergine<\/b><b>\u00a0to their animals.\u00a0<\/b><b>i.e.,<\/b><b>\u00a0one missing aspect from the combination.<\/b><\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"2\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\"><b>Availability of package:<\/b> The government system of announcing and implementing MSPs is inadequate.<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\"><b>MSP is announced for 23 crops but PPS and timely public procurement, are provided mainly for two crops, wheat and rice<\/b>.\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\">For other 21 crops, the full package is not available and the market price falls way below MSP.\u00a0<\/span><\/li>\n<li data-leveltext=\"o\" data-font=\"Courier New\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">It is the reason behind the demand for MSP continuation by Wheat and Rice farmers.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"3\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\"><b>Definition of MSP is another contested issue<\/b>&#8211; Farmers\u2019\u00a0organisations\u00a0are insisting on the\u00a0<b>Swaminathan Committee formula of C2+50 percent,<\/b>\u00a0also announced\u00a0by BJP government in its 2014 election manifesto, but not yet implemented.\u00a0\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"6\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\"><b>The MSP announced by the government is based on the A2+Fl+50 percent formula<\/b>, which, unlike the C2+50 percent formula, does not cover all the costs of farming.<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"2\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"2\"><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">This led to Farmers\u2019 lack of trust in the government regarding its \u201cassurance\u201d on MSP.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<table style=\"border-collapse: collapse; width: 100%; height: 281px;\">\n<tbody>\n<tr style=\"height: 281px;\">\n<td style=\"width: 100%; height: 281px;\"><span style=\"font-family: georgia, palatino, serif;\"><strong>Components of MSP Calculation:<\/strong><\/span><\/p>\n<ol>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>A2:<\/strong> the actual expenses paid by farmers in cash and kind for seeds, fertilisers, pesticides, paid labour, irrigation, etc.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>A2+FL:<\/strong> the A2 cost along with an adjustment for the costs of unpaid family labour (given traditional Indian farming practices involve families).<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>C2:<\/strong> A2+FL along with all other production costs, including loans, rentals, cost of land and other fixed capital assets, i.e. a comprehensive cost of production.<\/span><\/li>\n<\/ol>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt;\"><b>How has the significance of MSP\/PPS system changed over time?<\/b><\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\"><b>At the launch of the Green Revolution<\/b>, MSP and PPS were designed to<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"4\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\">incentivize\u00a0farmers to produce cereals \u2014 mainly wheat and rice \u2014and\u00a0\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"5\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">achieve food self-sufficiency, which was met by the early Seventies.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">At present, the purpose of MSP, PPS\/APMC are:<\/span><\/p>\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li style=\"list-style-type: none;\">\n<ul>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"6\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\">To maintain food self-sufficiency because crop diseases and extreme weather conditions can lead to food shortages.\u00a0<\/span><\/li>\n<li data-leveltext=\"\uf0b7\" data-font=\"Symbol\" data-listid=\"1\" aria-setsize=\"-1\" data-aria-posinset=\"7\" data-aria-level=\"1\"><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">To ensure a reasonable, assured income to the farmers.<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<p><span style=\"font-family: georgia, palatino, serif;\"><b>The 2nd purpose of ensuring reasonable income to farmers\u00a0<\/b>becomes crucial<b>\u00a0as 86 per cent of India\u2019s farming households are either marginal\u00a0<\/b>(cultivating less than one hectare of land) or<b>\u00a0small\u00a0<\/b>(cultivating between one hectare and two hectares of land).<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\">The above fact has been totally ignored by many pro-farm bill experts and even the Shanta Kumar Committee in its 2015 report by suggesting the dismantlement of FCI public procurement.<\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt;\"><b>Can MSP system co-exist with the Private market system?<\/b><\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\" data-contrast=\"none\">Government argument of Coexistence of MSP\/APMC with big agribusiness-controlled private markets doesn\u2019t look promising, due to the following factors.<\/span><\/p>\n<ol>\n<li><span style=\"font-family: georgia, palatino, serif;\"><b>Firstly, Contract with the private trader<\/b>, once entered into by a farmer, he will not be legally allowed to use the APMC mandi system for a better price than that contracted with the trader.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><b>Secondly, Dispute Resolution Mechanism doesn\u2019t favor farmers<\/b>. In case a farmer tries to use the other avenues providing better remuneration, private entities will take the non-compliant farmer to court.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><b>Third, Farmers will not be able to win a legal battle<\/b>\u00a0due to the structural inequities of legal resources and social-cultural capital under the dispute resolution mechanism.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><b>Fourth, Lack of choice for farmers<\/b>&#8211; The proposed dispute resolution mechanism increases the choice of the trader to trade i.e. can trade with n number of farmers but not of the farmers i.e. can enter into agreement with a single trader.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><b>Fifth, genesis of Centre-State conflict- As\u00a0<\/b>central law will prevail in the private markets, while state laws in the APMC mandis., it will create conditions for perpetual Centre-state conflicts.<\/span><\/li>\n<\/ol>\n<div id=\"primary\" class=\"content-area\">\n<article id=\"post-71306\" class=\"post-71306 post type-post status-publish format-standard has-post-thumbnail hentry category-7-pm\">\n<div class=\"entry-content\">\n<div class=\"pf-content\">\n<p><span style=\"font-family: georgia, palatino, serif; font-size: 14pt;\"><strong>How to improve MSP system in India? \u00a0<\/strong><\/span><\/p>\n<p><span style=\"font-family: georgia, palatino, serif;\">NITI aayog in its report provided with the following recommendations to improve the MSP system in India:<\/span><\/p>\n<ul>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>Awareness among the farmers<\/strong>\u00a0needs to be increased and the information disseminated at the lowest level so that the knowledge would increase the bargaining power of the farmers.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>Prompt payment:<\/strong>\u00a0The delay in payment needs to be corrected and immediate payment should be ensured. For sustainability of farming prompt payment at remunerative rates should be made.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>Timing of MSP announcement:<\/strong>\u00a0MSP should be announced well in advance of the sowing season so as to enable the farmers to plan their cropping.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>Transport and storage<\/strong>: More god owns should be set up and maintained properly for better storage and reduction of wastage. Transport facility (say, in the form of providing two wheelers) for Purchase Officers may be considered to help them effectively discharge their work.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>Updated criterion for fixing MSP:<\/strong>\u00a0The criteria for fixing MSP should be current data and based on more meaningful criteria rather than C3.<\/span><\/li>\n<li><span style=\"font-family: georgia, palatino, serif;\"><strong>The small and marginal farmers<\/strong>\u00a0can be provided with Procurement Centres in the village itself to avoid transportation costs.<\/span><\/li>\n<\/ul>\n<p><span style=\"font-family: georgia, palatino, serif;\">MSP has been very helpful in keeping agriculture in our country alive and we have been able to become self-sufficient in food grains due to it. It becomes crucial for government to provide some solid assurance to farmers that it won\u2019t be allowed to die down.<\/span><\/p>\n<\/div>\n<\/div>\n<\/article>\n<p>&nbsp;<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>This article has been created based on the Indian Express article \u201cMisunderstanding the MSP\u201d\u00a0\u00a0 Synopsis-\u00a0Mere amendments to farm laws will not solve the MSP issue, as the MSP system may not be able to face the private system of farm laws. Syllabus&#8211; GS\u00a0Paper III\u00a0(Issues related to direct and indirect farm subsidies and minimum support prices)&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/contradictions-between-farm-laws-and-the-msp-system\/\">Continue reading <span class=\"screen-reader-text\">Contradictions between farm laws and the MSP system<\/span><\/a><\/p>\n","protected":false},"author":61,"featured_media":75972,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[130],"tags":[1285,1275,7996,1471],"class_list":["post-75967","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-7-pm","tag-agri_0","tag-agri_1","tag-bills_policies","tag-farm_laws_related_issues","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2021\/01\/Contradictions-between-farm-laws-and-the-MSP-system.jpg?fit=1280%2C720&ssl=1","views":{"total":0,"cached_at":1700772966,"cached_date":1703741047},"jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/75967","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/61"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=75967"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/75967\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/75972"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=75967"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=75967"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=75967"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}