Msp Legal Right
Birender Singh said that in a country like India, where 55% of the population depends on the agricultural sector, economic growth cannot focus on industry and trade. Exports worth more than Rs 5 lakh crore are related to agricultural products. But where is the farmer`s participation in this economic cycle? Farmers must be given the feeling that they, too, have a certain right to the growing wealth of the land. Veteran business journalist Swaminathan Aiyar said in a Times of India column that the government was right when it pushed through the agricultural laws – without enough consultation and debate. He justified this by saying that many governments in the past had passed laws without much discussion and debate, such as an example from Bihar in the 1970s, where all laws were enacted in the form of decrees, which were promulgated after they expired because they could not be passed due to opposition disturbances in the assembly. Previous congressional administrations were also known for passing legislation. Let us now turn to the economy. The total value of the production of the 23 crops at MSP prices for 2020-21 was around Rs 12 lakh crore. (This was also Harish Damodaran`s estimate, “What meet MSP demand would cost govt,” IE, November 29.) The total MSP score for a crop is calculated after multiplying the government`s annual production figures by the MSP. If you add up the 23 MSP cultures, you get the number above. This is government data and simple mathematics. But not all products are marketed or sold. The population of farmers, including their family members, represents about 50 percent of the country.
They save a large part of their products for their own consumption, animal feed and seeds. Some is also traded within the village and some is also eaten or spoiled by rodents during harvesting, transportation and storage. About Rs 4 lakh crore value of 23 MSP plants is consumed in this way. Only MSP plants worth Rs 8 lakh crore are actually traded. If we look at the data for the government`s purchase of these 23 crops from the MSP, including sugarcane, the amount rises to about Rs 4 lakh crore. Thus, only MSP factories worth about 4 lakh crore are bought by the private sector. Farmers are also seeking legal enforcement of PSM in this part. 4) A stable import-export policy from the beginning of the planting season to the end of the marketing year for each crop would be useful. As Kavitha Kuruganti, a farmers` rights activist, writes in The Wire, “This would ensure that the landed price of a product is not lower than the MSP where our farmers are likely to be excluded.” Chaudhary Birender Singh, a senior BJP leader and grandson of legendary agricultural leader Sir Chottu Ram, supports farmers` demand for a legalised PSM. The Wire told The Wire that India cannot achieve a $5 trillion economy by ignoring its farmers.
He said that a few months ago, a farmer leader of the SKM also agreed that it was difficult for a government to buy every grain from the MSP. Farmers` unions suspended their agitation for several years after the government repealed the three farm laws and then reached agreement on other demands, including the formation of a committee to deal with the issue of a legal guarantee for minimum support prices (MSPs). This demand has been the subject of much debate since the beginning of the peasant agitation, which revolved around its economic and legal feasibility. Economists have put forward many arguments, but most are not supported by solid data or economic logic. Ashok Gulati and Shweta Saini wrote (“How to help the farmer”, IE, December 20) that Rs 5.4 lakh crore is needed to buy only 10% of the production of 23 MSP crops, excluding sugarcane. Nothing could be further from the truth. However, other unions have said that if private buyers do not buy their crops, the government must be prepared to buy the entire surplus at MSP rates, which places a much heavier burden on the Treasury, although no one has yet outlined the specific tax implications. The demand is popular not only within the SKM, but even among unions that support the BJP-led central government. SSR-affiliated Bharatiya Kisan Sangh held its own agitation in September, complaining that the current PSM regime largely benefits only two states. She called for a law guaranteeing all farmers lucrative prices, calculated according to different input rates in 15 different agro-climatic zones. All farmers` groups seeking legal support for PSM also want it extended to fruit and vegetable producers who were previously excluded from benefits.
Another major problem with MSP as a legal guarantee is that it could increase the government`s efforts to ensure the storage of the purchased crop. Thus, the absence of a law requiring MSP does not mean that companies are able to take advantage of farmers in need. The courts are not deprived of the powers conferred on them by the Indian Contract Act of 1872 and the Constitution, and they are indeed required to protect the right of farmers to sell their crops at low prices. The legalisation of PSM would legally oblige the government to buy any grain from the crops for which PSM are advertised. For this, the Union government will have to spend Rs 17 lakh crore, according to the rough estimate of government officials shared during talks between the government and agricultural unions last year. The protesting farmers believe that the MSP, as a legal right, will solve the problems of many farmers, including debt. According to this theory, a legal guarantee for PSM seems feasible and will not be ruinous from a tax point of view. However, as I will explain, it is like putting the cart before the horse if you only talk about the financial side of things before anything else. While farmers` demand for the legalisation of PSM is being questioned due to the allegedly high costs the government would have to bear, the potential benefits it would have for the agricultural sector in general outweigh the costs. Yogendra Yadav opposes growing propaganda against the legalisation of the MSP The SKM letter states: “The minimum support price based on overall production costs (C2+50%) should be a legal demand of all farmers for all agricultural products, so that every farmer in the country can be guaranteed at least the MSP announced by the government for his entire harvest.” Without the legal mandate, the government is not obliged to buy the 23 crops under the MSP.
Another argument against farmers` demand is that if the Union government makes the MSP a legal mandate to ensure that private actors or government agencies buy the crop at least at a fixed price throughout the country, there will be higher prices and higher inflation in general.