Farmer members of MSP panel seek reserve price for crops with legal guarantee, statutory status to CACP

Legal recognition of the minimum price of crops is being considered in the committee formed on the issue of Minimum Support Price (MSP). Farmer representatives included in the committee have proposed to fix the reserve price by adding 50 percent amount on top of A2 Plus FL. It says that a legal provision for reserve price should be made and no one should be allowed to buy crops from farmers at a price lower than that. The auction in the mandis should start at the reserve price only and not less than that. Those who buy below the reserve price will be fined.

However, according to the government, the MSP on A2Plus FL is being fixed from 2018 by adding 50 percent. But as far as most of the big farmer organizations are concerned, they are demanding legal guarantee to fix MSP and implement it by adding 50 percent amount on C2 cost. This was the demand of the agitating farmer organisations. It is a different matter that the constituents of the Samyukt Kisan Morcha had refused to join the committee formed by government. But from the opinion of the farmers included in the committee, it seems that they are walking with the government in the matter of formula for determining MSP.

The committee on the issue of MSP was formed after agreeing to end the farmers' movement that lasted for more than a year against the three agricultural laws. Under this committee, a sub-group on MSP Effectiveness and Transparency was formed. This sub-committee has suggested the reserve price to the chairman of the committee. Agricultural Costs and Prices Commission (CAPC) member Naveen P Singh, farmer leaders Pasha Patel, Gunwant Patil and Krishnabir Chaudhary are members of this sub-committee. Rural Voice has seen the documents of these proposals.

It has been said in the proposal that bidding for agricultural products in the mandis should start above the reserve price only. State governments should make legal provisions for this. The committee says that while determining the import duty on agricultural products in the country, the fact should be kept in mind that the import should not be at a price lower than the reserve price.

This sub-committee has also recommended giving statutory status to CACP or making it autonomous and making a farmer representative its president. Its proposal states that the existing formula of CACP for estimating the cost of crops should be changed and the actual cost should be made the basis. Farmers should be free to sell their crops anywhere and provision for deficiency payment should be made to farmers across the country. Mandi tax rates should also be uniform across the country.

Other recommendations of the sub-committee include forming a separate committee to assess the actual cost of production, including more number of farmers in the sample size, considering the subsidies given in different states while deciding the MSP, farmers, traders etc. This includes creating a dispute resolution authority at the district level consisting of consumer and government representatives.

The central government had formed the MSP committee under the chairmanship of former Agriculture Secretary Sanjay Aggarwal. But instead of limiting the scope of the committee to MSP, topics like working style of CACP and natural farming were added to it. The committee was constituted through a gazette notification on July 12, 2022. Its first meeting was held on August 22, 2022. The committee has held several meetings in different parts of the country. However, even after a year of formation, it is difficult to say when its recommendations will come.

According to sources, there are sharp differences among the members on the recommendations of the committee. The most controversial issue is to give it a legal form by fixing the reserve price instead of MSP. Many members are not comfortable with the proposal of giving statutory status to CACP and giving prominence to farmer representatives in it. Some members have suggested a nationwide referendum while some members say that by ending all restrictions on exports, the Essential Commodities Act should also be abolished. It is a different matter that the government has continuously used the provisions of the Essential Commodities Act to control the prices of food products for the last one and a half years.