Kisan Sabha Presents Model Bill on MSP, Offers 50% Margin over Cost

Taking the farmers’ demand for a law on the Minimum Support Price (MSP) of crops a step further, the All India Kisan Sabha on Friday released a model MSP Bill to ensure a 50% margin over the cost of production, keeping with the recommendations of the Swaminathan Commission.

Presented amid the over two-month-long farmers agitation against three farm laws and with the demand for legal guarantee of MSP, the Bill aims to ensure fair and remunerative price for farm produce. It sets the MSP with a margin of 50% over the Comprehensive cost (C2). The national commission on farmers headed by M.S Swaminathan had put the recommended formula for MSP as (50%+C2). Here, C2 includes imputed costs of family labour, imputed rent of owned land and imputed interest on owned capital.

The AIKS hopes to get the Bill introduced in the Parliament as a private member’s Bill during the second part of the budget session, the Hindu Business Line reported.

Speaking to the media, AIKS general secretary Hannan Mollah said the enactment of a law guaranteeing MSP did not mean the government would have to bear the entire financial burden, but that anyone buying from farmers, be it the government or a private trader, would be legally mandated to pay the minimum price. However, he alleged, the government did not want to bring in such a law as it wants to ensure “maximisation of profit to the corporate houses.”

On the government’s verbal assurance of MSP continuing, Mollah said, “Why should we accept this? More than 90% of farmers don’t get MSP and they are forced to sell their produce to local traders at one third price.” As he underlined the need of an MSP law, he added that the government and its ‘higher intellectuals’ were concealing the fact that only 6% farmers avail MSP. “Without MSP, farmers are only losing and losing, and then committing suicide.” He further said, out of 23 announced crops for MSP, government only procures two - rice and wheat.

What Model Bill Says

Beside fixing the benchmark MSP, the Bills says, “A system of authority to monitor and fix Minimum Support Price to all crops from time to time shall be ensured.” It says the procurement of agricultural produce at rates lower than MSP should be treated as an offence.

The model MSP Bill suggests creation of social cooperatives of workers and peasants in order to supply farm produce to “Primary Agricultural Self Help Groups” at MSP, according to the report in the Hindu Business Line. The bill also recommends creation of a scheme that will give farmers a certain fixed percentage of the surplus income earned from value-added products processed from the primary agricultural products as additional price.

Mollah and AIKS national president Ashok Dhawale said that the benefit of surplus created out of value addition of farm produce is taken by the companies. Citing the example of Basmati rice, they said while farmers get Rs 18 to Rs 30 per kilogram from the intermediaries for Basmati paddy, branded Basmati is sold at about Rs 208 per kilogram.

The Bill also recommends formation of Self Help Groups with the approval and under the direction of the respective ‘Block Agricultural Social Co-operative Processing and Marketing Centre’ comprising of not less than twenty and not more than forty farmers and agriculture workers residing in the respective local bodies.

The model Bill also proposes establishment of Price Stabilisation Fund (PSF) with the contribution from farmers and others and the support of various government schemes, interest free loans from the financial institutions with government guarantee and share from the surplus income of the social cooperatives.