June 12, 2022

AIKS Condemns MSP Fraud

THE All India Kisan Sabha in a statement issued on June 9, noted that the Modi government has once again defrauded farmers by making meagre increases in the minimum support prices (MSP) for Kharif crops. In the MSP announced for Kharif 2022-23, MSP for rice, maize, tur, urad and groundnut has been increased by just 7 per cent, and for Bajra by just 8 per cent. In most crops, the increases barely cover the general inflation in the economy.

AIKS said that it is important to note that these paltry increases in MSP have been made when cost of production has increased sharply for farmers because of high prices of fuel and other inputs, and massive shortages and price rise in supply of fertilisers. Even in the last season, black marketing of fertilisers was rampant because of shortages of supply. The situation has turned worse in the recent months because of sanctions by US and EU against Belarus and Russia.

It is also noteworthy that this has been done in a period when global prices of food commodities have been very high. This means, for commodities like edible oils and pulses, for which India is import dependent, a much higher price is paid through imports to farmers of developed countries who grow oilseeds and pulses than is proposed to be paid to our own farmers. Rather than offering remunerative prices to our own farmers so that India's import dependence could be reduced, government is discriminating against them.

Once again, the government has made misleading claims about the return over cost of production promised through MSP. Government has made gross under-estimation of cost of production for Kharif 2022-23. And, as it has been doing in recent years, instead of computing return over total cost (C2), the return is computed over A2+FL cost, which excludes the cost of the farmer's own resources. This is a fraud done with farmers as the MSP does not even fully cover the total cost of production.

AIKS demands that government should implement the Swaminathan Commission formula of C2+50 per cent in right earnest, making a realistic estimate of the total cost of production and ensuring that farmers are paid a 50 per cent return over that. Government also needs to ensure that systems of public procurement are put in place for pulses, oilseeds and millets so that farmers can be incentivised to grow more of these crops and India's import dependence for pulses and oilseeds can be reduced. Edible oil and pulses should be included in the public distribution system, which will incentivise farmers to grow these water-saving crops, help bring down food inflation and improve food security in the country.

As is well known, since there is no government procurement in most parts of the country, only a small fraction of farmers in India will be able to avail of the paltry MSP declared by the central government yesterday. 

AIKS calls upon farmers across the country to protest against the fraud in MSP being committed by the Modi government and rally once again unitedly to demand a statutory right to remunerative MSP for their crops.