MSP not most preferred mode for farmers in UP

28% sell at MSP, 63% trade in the open market and 8% keep grains for selfconsumption, according to Niti Aayog study published in 2016

Only a fraction of farmers in Uttar Pradesh sell their produce to the government agencies taking the Minimum Support Price (MSP) route while rest prefer to trade in the open market or deal with private agents, sometimes even below MSP for different reasons.

MSP is the primary and immediate concern of farmers who are protesting against the three agriculture reform bills passed by Parliament recently. They fear that after enactment of the new laws, the Centre may withdraw the safety net (MSP).

“We cannot trust verbal commitment on MSP. The government must make a provision in the law itself guaranteeing MSP will continue,” said Bharatiya Kisan Union state president Rajveer Singh Jadaun.

Based on the recommendations of the Commission for Agricultural Costs and Prices, the Central government declares MSP for around two dozen crops before their sowing seasons. The idea behind MSP is to give a guaranteed price and assured market to farmers and protect them from price fluctuations and market imperfections.

Although MSP system is considered an important tool that protects farmers’ interests by assuring a threshold price to them, studies show that only a fraction of crops under MSP are sold to the government in UP where wheat and paddy are two major crops.

“It is observed that 28% of the farmers in UP sold their grains under MSP, 63% sold their grains in the open market and the remaining 8% kept for their self-consumption. It has also been observed during the course of study that 82% of the farmers reported to have faced various and hence lower price is offered. “More than two-thirds of the farmers surveyed complained about the long distance from the market and lack of transport facilities. Delayed payment and false weighing were the other common problems faced by the farmers. About 20% farmers opined that they face problems in marketing as they have small surplus to sell,” he said.

According to the Niti Aayog study, the respondents in selected in UP villages were in favour of continuation of MSP, which indicated that in spite of all the lacunae in the process of implementation, people, on the whole, had benefitted from the MSP policy.

Singh also said MSP was an important mechanism that insulated farmers against market price fluctuations as well for the government to buy wheat and paddy for the Public Distribution System (PDS) pool.

“I, therefore, feel that farmers’ fears that the government may do away with the PDS system are a little exaggerated,” Singh stressed.