Should Minimum Support Price be legalised?
Farmers are also worried about input cost calculation methods such as A2+FL and C2+50%. What could be the best mechanism to calculate the input costs?
Less than onethird of the crop production is traded through mandis; the rest is sold by marginal farmers to village traders. So, even if MSP becomes legalised, it will be difficult to implement it because there is no record of who is buying and selling and at what rate.
LS:
The idea of C2+50% cost has come from industry. Agriculture requires remunerative prices. I think the C2 estimation of costs for agricultural crops is going to be almost comparable with other prices which we have in various sectors of the economy.
SH:
There have been several suggestions, including a report by Dr. Ramesh Chand, about certain changes in the methodology of calculating the cost of cultivation. Those changes have not yet been decided. The problem is whatever price you fix, you are not able to ensure the A2+FL price. Sometimes, the price is so low that it is below the cost of cultivation.
The answer is not easy to find. The government cannot be deciding the prices of every agricultural commodity. Many farmers and organisations prefer selling to corporates because there used to be a lot of glut of at one point of time. Now, at least there are some large buyers. So, we can’t say that corporates should be completely prevented from purchasing and storing agricultural commodities.
Are cooperatives an alternative to help farmers? SH:
Cooperatives have been successful in certain sectors. For example, in the milk sector, they brought the White Revolution in Gujarat. It was due to the failure of cooperatives that the government came up with the idea of farmerproducer organisations (FPOs). Now, we are going back to cooperatives. Any form of aggregation which can help the farmers in realising better prices is welcome. But both cooperatives and FPOs have been captured by influential vested interests in rural areas. If cooperatives can create storage structures where the farmers can store their produce at reasonable prices to reap the benefits of higher prices in the off season, they are welcome.
LS:
When we have to look for alternatives, we cannot rely on a single intervention. If you want to promote cooperatives, bring in a law and storage capacity. Governmentsupported cooperatives have failed because of corruption. This organisation has a future, but we need a legal framework within which they can flourish. And they need supportive infrastructure.
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