THE POLITICS OF MINIMUM SUPPORT PRICE
Three highly contentious farm bills made their way through the Rajya Sabha between September 20 and 22, amid vociferous political opposition and farmer protests in the country. Two of these bills—the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill and the Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill—were passed by voice vote on Sunday, September 20, and the Essential Commodities (Amendment) Bill on September 22, when the Opposition parties had decided to boycott proceedings in Parliament.
In an apparent attempt to stem the tide of farmer protests across the country, especially in the northern states of Punjab and Haryana, Prime Minister Narendra Modi tweeted his reassurances just hours after the first two bills were cleared by the Rajya Sabha. Defending the “historic new
laws”, the tweets, composed in Punjabi, sought to reassure farmers that they needn’t fear any dilution in the MSP (minimum support price) mechanism nor any slackening of government procurement of their produce.
In effect, the new laws open up the agriculture sector to private sector players, allowing anyone with a PAN card to buy produce directly from farmers. Earlier, these purchases were possible only through APMC (Agriculture Produce Marketing Committee) mandis. The old regime, for all its imperfections, was a sort of insurance mechanism for the farmer. It served as a safety net in two ways—assured procurement by the government and a floor price (MSP) for his crop. The protesting farmers say the new laws, in creating an alternative to APMCs, in the name of giving them options, are in fact laying the foundations of a procurement dispensation that will ultimately bypass APMCs and abolish the current procurement and MSP protections.
The Centre insists that it has no such plan and that private agricultural markets will complement the APMC system, not replace it. On September 21, the cabinet committee on economic affairs approved MSP hikes for six rabi crops, just 45 days before the sowing season was to begin. Agriculture minister Narendra Singh Tomar also assured the Lok Sabha that agencies like the FCI (Food Corporation of India) and NAFED would continue to procure stocks from mandis at MSP prices.
Farmer groups point out that the new laws do not require prices for sales to private parties to be linked to MSP. Without this protection, critics of the new laws point out, farmers with smaller landholdings will be vulnerable in price negotiations with corporates. This is a problem: in Punjab and Haryana, around 72 per cent and 67 per cent of farmers have less than 5 acres of land. The issue has drawn together unlikely allies—even RSS affiliates like the Bharatiya Kisan Sangh (BKS) are protesting the new law. “We want
MSPs to be [part of] the law. We are not against reforms, but farmers must get fair payment for their produce,” says Badri Narayan Chaudhary of the BKS.
The protests have already drawn political blood. Two days before Parliament’s monsoon session began, agitations by Punjab farmers forced BJP ally Shiromani Akali Dal (SAD) to publicly oppose the bills. Just days later, Harsimrat Kaur Badal, the SAD’s Union cabinet minister and wife of party chief Sukhbir Singh Badal, resigned her post in protest. Sources say BJP leaders hope to resume conversations with farmer groups after the harvest and marketing season for the rabi crop begins in early October.
The Big Picture
For several years now, there have been attempts at state and central levels to increase private sector participation in
IF CROP PRICES ARE NOT LINKED TO MSP FOR SALES TO PRIVATE PARTIES, SMALL FARMERS WILL LOSE BARGAINING POWER, IT IS FEARED
agriculture. The Centre has been pushing states to adopt the model Agriculture Produce and Livestock Marketing Act, 2017 and the model Agriculture Produce and Livestock Contract Farming Act, 2018, which allow private capital within the APMC set-up. Apart from these, 18 states, including Punjab, Rajasthan, Gujarat and Tamil Nadu, have in recent months allowed corporates to set up private mandis.
There is also an international perspective. For several years, India has been in negotiations with the WTO (World Trade Organization) for an Agreement on Agriculture (AoA), which forms the basis of many free trade deals. Western nations have long demanded that India limit agriculture subsidies for an AoA. In 2015, negotiators arrived at a ‘peace clause’, under which MSPs are classified as ‘amber’ issues, which western nations say distort free trade. (It allows MSPs upto 10 per cent of GDP.) Western subsidy models—direct income support, crop insurance and input subsidies—are ‘green’ under AoA agreements.
Since India already provides income and input subsidies—Rs 6,000 per farmer per year, with a mechanism being worked out for direct power and fertiliser subsidy transfers—some say the new law, by not explicitly benchmarking private sale prices to MSP, shows the Centre is preparing the ground to abolish MSP. They say it reveals the long-term trajectory the Centre envisages for these agri-reforms—do away with MSP to allow free international trade. They also point out that this is broadly in line with the recommendations of the Shanta Kumar committee (a review committee for agri-reforms, set up by PM Modi) report in 2015, which suggested restructuring the FCI and rationalising food and fertiliser subsidies.
Agriculture economist Tajamul Haque says, “Some of the concerns of farmer groups are very genuine and must be resolved. Some can still be addressed while framing the rules.” One way or another, farmer groups say the safety net of an MSP mechanism is critical. Without the government setting floor prices for crops, small farmers, who have neither bargaining power nor expertise for price discovery, will be at the mercy of corporates. Agriculture minister Tomar demurs, and insists the private markets will only complement the existing APMC structure: “We are giving options to farmers—no one is compelling them [to choose one or the other]. If a farmer thinks the APMC mechanism is good, he can opt for that; if he wants to sell his produce to a private company, he should be free to do so.”
Actress Ashalata Wabgaonkar, 79, was shooting Sony Marathi’s mythological daily Aai Majhi Kalubai in Satara, Maharashtra, when she tested positive for Covid along with 20-plus members on the show. While most were home quarantined, Ashalata was admitted to a private hospital. A week later, on September 22, she succumbed to the virus. A dance group called in from Mumbai for a song sequence to be featured in the show is reported to have passed on the virus to the crew. The actress’s demise was a worrying reminder of the dangers the elderly face as they resume work in an atmosphere where even adhering to recommended precautions is proving to be an inadequate shield against the virus.
In July, the Indian Motion Pictures Producers’ Association (IMPPA) had filed a petition in the Bombay High Court challenging the Maharashtra government’s standard operating procedure barring actors and technicians above the age of 65 to work on sets. “There are so many federation workers above 65 dependent on films for their livelihood. What else can they do?” says T.P. Aggarwal, IMPPA president. “Nobody is forcing them to work, but one can’t stop them from working either.” Aggarwal and actor Pramod Pandey, both 70, won the case after judges S.J. Kathawala and Riyaz Chagla asked the government counsel, advocate Purnima Kantharia, if there was a provision stopping those above 65 from working in any other field, to which Kantharia responded that there wasn’t. Ashalata’s death, says Aggarwal, reiterates the need for added precautions. “You can’t say that she died because she was working.”
IMPPA’s action has enabled many, like Amitabh Bachchan, to return to work. The veteran Bollywood actor, who had tested positive for Covid in July, started shooting again on September 7, roughly a month after he was discharged from Nanavati Hospital, where three members of his family—son Abhishek, daughter-in-law Aishwarya and granddaughter Aaradhya—were also treated. The