Vol. XLI No. 26 June 25, 2017

BJP Govt Mocks Peasant Protests by Announcing MSP below Cost of Production

AMIDST countrywide protests by farmers demanding fixing minimum support prices according to Swaminathan Commission recommendation of cost of cultivation (C2)+50 per cent ie, at least 50 per cent over and above the cost of production, the BJP government has made a mockery of the peasantry by announcing MSP of kharif crops for 2017-18, which is even far below cost of production. AIKS, in a statement issued on June 19, has condemned this insensitive move and approach of the BJP government towards the plight of the peasantry.

There are a few things to be noted. First and foremost, any MSP announced is only notional unless there is assured procurement at that price across the country through a network of purchasing centres. Often procurement is restricted to only a few days, unwritten ceilings on pretext of quality or grade etc are other ways through which farmers are forced to make distress sales to traders who rake in profits at their expense. The BJP government has been systematically dismantling public procurement instead of expanding it to newer areas and assuring procurement at MSP.

Secondly, the calculation of cost of production is itself disputed and depends on Directorate of Economics and Statistics Comprehensive Scheme data with a time lag of three years, ie, cost of production three years back.  The projected cost of production estimates of 14 crops for kharif season 2017-18 are based on actual estimates for the latest three years viz, 2012-13 to 2014-15. The calculations by state governments are much higher than calculations by CACP and are closer to calculations by farmers.

For majority of the crops, MSP fixed is even lower than the CACP’s own calculation of cost of production. Cotton Medium Staple C2 is Rs 4,376 per quintal; MSP fixed is Rs 4,020 per quintal. Moong C2 is Rs 5,700 per quintal; MSP is Rs 5,575 per quintal. Ragi C2 is Rs 2,351; MSP fixed is only Rs1,900 per quintal. Nigerseed C2 is Rs 5,108 per quintal; MSP is Rs 4,050 per quintal. Jowar hybrid C2 is Rs 2,089 per quintal; MSP fixed is Rs1,700 per quintal. Sesame C2 is Rs 5,706 per quintal; MSP fixed is Rs 5,300 per quintal. Sunflower C2 is Rs 4,526 per quintal; MSP fixed is Rs 4,100 per quintal. It is notable that the cost of production is the weighted average cost and costs in states are much higher. The Narendra Modi led BJP government claims that farmers’ incomes will be doubled when in reality they are getting negative incomes due to the anti-farmer policies.

MSP of tur/arhar which was Rs 5,050 per quintal has been increased to Rs 5,450 per quintal including a bonus of Rs 200 per quintal, is the claim. It is notable that the cost of production calculations for 2016-17 Kharif Marketing Season by the State Agricultural Departments in Andhra Pradesh, Telangana and Karnataka are Rs 5,722 per quintal, Rs 6,841 per quintal and Rs 5,100 per quintal respectively. The MSP calculated on the basis of weighted average cost of production and other factors falls far below even the cost of production in these states. MSP suggested by states were Andhra Pradesh - Rs 8,583 per quintal, Telangana - Rs 10,261 per quintal, and Karnataka – Rs 6,500 per quintal. Now a full year after that the BJP government has announced only Rs 5,450 for a quintal of tur/arhar. This is as opposed to the recommendation of Arvind Subramaniam to ensure Rs 6000 per quintal for tur/arhar as well as urad for 2016-17 and Rs 7,000 per quintal in 2017-18.

In paddy, maize and bajra mechanically a meagre increase in MSP has been made without proper cost calculations. For paddy, C2 considered is Rs 1,484 per quintal while the C2 in Bengal, the largest producer is Rs 1,725 per quintal. Soyabean C2 is Rs 2,921 per quintal and MSP fixed is Rs 3,050 per quintal, a meagre increase of only Rs 129 per quintal.

The government also claims that it has “convinced” seed associations to curtail prices of hybrid seeds by 10 per cent. After deregulating inputs and giving a free hand for companies to fix farm-gate prices without any government intervention for price control this claim cannot convince farmers. Seed companies are fleecing farmers and increasing prices of hybrids.  

All India Kisan Sabha has called upon its units to expose the insensitive, anti-farmer stance of the BJP government in the wake of acute agrarian distress and hold protests against this approach.