October 23, 2022

MSP Announced Betrays Farmers, Increasing Costs Not Taken Into Account

THE All India Kisan Sabha, in a statement issued on October 20, has said the Modi government has once again displayed its crass anti-farmer attitude in the recent announcement of the minimum support prices for crops for the Rabi Marketing Season 2022-23. The prices announced by the government are too little and will never provide 50 per cent return to farmers over Cost C2 as was recommended by the Swaminathan Commission. The increase in MSP is too meagre to either cover the greatly increased cost of cultivation or to cover the inflation in prices of consumption goods that farmers have to buy.

The MSP of wheat has been increased by only 5.5 per cent and of Chana by only 2 per cent. It must be remembered that in most months of 2022, the inflation in consumer prices of food has been well above 7 per cent.

Over the last one year, there has also been a steep increase in prices of fuel and fertilizers. In particular, shortages in supply of fertilizers in the last few seasons have resulted in large-scale black marketing of fertilizers in many parts of the country. However, taking no cognisance of the problems faced by farmers, the Commission of Agricultural Costs and Prices (CACP) has grossly underestimated the increase in cost of cultivation. According to CACP, the cost of cultivation of most rabi crops has increased only by 3.8 per cent for wheat, 5.4 per cent for chana and 6.7 per cent for rapeseed and mustard. These reflect a huge underestimation of inflation in prices of agricultural inputs.

Even if one takes these cost estimates at face value, the expected returns from cultivation of various rabi crops are meagre and are set at almost the same level as last year. For example, for wheat, the most important rabi crop, the return is merely 30 per cent over official estimates of Cost C2. For gram, the return is only 20 per cent. Given that the official estimate of C2 is too low, the actual return will be lower still.

Further, the AIKS has always reiterated that the MSP declared every six months for selected kharif and rabi crops has no meaning for farmers in large parts of the country, because there is no procurement by the central government. Farmers thus are forced to sell at much less than the MSP to local traders. 

The All India Kisan Sabha deplores this anti-farmer announcement of MSP for the Rabi 2022-23 season. It once again reiterates the demand that MSP should be fixed using the Swaminathan Commission formula, and calls upon the farmers of India to greatly intensify their countrywide struggle for a legal guarantee to MSP at the rate of one and a half times the comprehensive cost of production.