MSP Revision a Betrayal of Our Movement, Covers Only Inflation Impact, Say Farmer Leaders

New Delhi: Terming it a “cruel joke” on farmers, farmer organisations on Thursday said that the increase in minimum support price (MSP) of 14 crops for Kharif season 2022-23 announced by the Centre merely covers the impact of inflated prices of inputs including seeds, fertilisers, pesticides and diesel.

The organisations said that a comparison of increase in MSP with inflation numbers announced by the Reserve Bank of India makes it amply clear that there is no incentive to farmers even after they protested at the borders of the national capital for more than a year, seeking a dignified life.

Ashok Dhawale, president, All India Kisan Sabha (AIKS), said that MSP for Kharif 2022-23 for rice, maize, tur, urad and groundnut has been increased by just 7%, and for bajra by just 8%. In most crops, the increases barely cover the general inflation in the economy.

Talking to NewsClick, Dhawale said: “It is important to note that these paltry increases in MSP have been made when the 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 the US and the EU against Belarus and Russia.”

The AIKS leader pointed out that the MSP hike also overlooks developments leading to the meteoric rise in prices of wheat, oilseeds and pulses, adding that farmers should have been incentivised for local production to avoid huge import bills.

“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, the government is discriminating against them,” he added.

Dhawale said the claims made by Agriculture Minister Narendra Singh Tomar about providing MSP as per the Swaminathan Commission report “were simply wrong” given the calculation of costs were done through previous formula of A2+FL where A2 accounts for inputs bought by cash plus family labour.

Farmers’ organisations have been demanding that the Commission for Agricultural Costs and Prices should compute MSP through C2+50% formula where costs regarding rent, interest foregone on own land and fixed capital assets too are calculated to make agriculture profitable, he said.

“We have been demanding that the government should implement the Swaminathan Commission formula of C2+50% in earnest, making a realistic estimate of the total cost of production and ensuring that farmers are paid a 50% return over that”, adding that the government should also 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,” the AIKS leader said.

Talking about the numbers, Yogendra Yadav, core committee member of the Samyukta Kisan Morcha(SKM)  said that the monetary policy committee of the RBI forecast an inflation of 6.7% in FY23. In terms of input cost for farmers, the inflation is even higher, since the price of diesel and fertilisers has increased significantly.

“If the inflation in input cost for the farmers is compared with the MSP declared by the government, then it is clear that for 11 out of the 14 crops, the increase in MSP is less than the cost inflation. Thus, in real terms, the MSP has been reduced for 11 crops”, he told NewsClick.

Yadav said: “If the MSP declared by the Modi government for  Kharif crops in the last nine years is compared with the preceding nine years of UPA government, then for every crop the increase in MSP during the Modi government is lower. It is clear that instead of fulfilling its promises of doubling farmers’ income, the Modi government is determined on reducing farmers’ income. Today’s announcement has once again revealed the anti-farmer agenda of Modi Government.”