Informist, Friday, Feb 23, 2024
By Sayantan Sarkar, Surya Tripathi and Abhijit Doshi
NEW DELHI – The government must guarantee minimum support prices for all crops and ensure prices do not fall below a certain level even without the Centre having to procure those commodities, says V.M. Singh, a former member of the Legislative Assembly and national convener for the Rashtriya Kisan Mazdoor Sangathan. There should be a minimum support price for farmers and a maximum retail price for consumers, Singh tells Informist in an interview.
Singh has been vocal about a minimum support price for all crops, and was also active during the 2020–21 farmers' protest. In November, he was also appointed as the national president of MSP Guarantee Kisan Morcha.
Singh says the government must follow the example of petrol, where it fixes the rate and consumers buy directly from retail outlets, while bringing out a law on MSP for agricultural crops. "We are an agrarian society. Why can't we work it out? If I had my way, I would have an agricultural planning commission in the country," Singh says.
The MSP for crops can be clubbed with mechanisms of market interventions as well, says Singh. "After the Russia-Ukraine War, market rates were so high for wheat that the government did not procure it. So, there's no weight on the exchequer. But, if prices are lower, they should intervene to push the market up."
Singh further says that if talks with the government have to yield any meaningful result, the Centre should invite members from all major farmers' unions to the table. "The discussions should be televised. Have the debate on camera and let the country see before the election whether farmers are right or not", says Singh.
Farmers have been protesting on the outskirts of Delhi, Haryana, and Punjab since Feb 13. Agitating farmers have been demanding legal guarantee for minimum support price for all crops, based on the formula recommended by the M.S. Swaminathan commission. The commission recommended that the minimum support price should be at least 50% more than the weighted average cost of production. This was also known as the C2+50% formula, which includes the input cost of capital and the rent on the land. The farmers are also demanding implementation of a comprehensive debt relief programme, including a complete waiver of debt for farmers and labourers, reports say.
Moreover, farmers also seek a pension scheme for them and agricultural labourers, and reinstatement of the Land Acquisition Act, 2013. Some other demands include justice for victims of the Lakhimpur Kheri violence and compensation for families of farmers who died during the agitation held in 2020-21, according to reports.
This is the second major protest against the Narendra Modi government by farmers. In 2020 and early 2021, farmers carried out widespread protests against three farm laws passed in September 2020. These laws were eventually withdrawn by the Centre in November 2021.
Below are the edited excerpts from the interview:
Q. What is your view on the list of demands by farmers?
A. The entire country is only united over a law on MSP guarantee. This is a demand that has been there since (the year) 2000. When the Congress came into power in 2004, the Manmohan Singh government set up a national commission for farmers. Mr. Swaminathan was the chairperson. It is not the Swaminathan Commission, it is the national commission of farmers, headed by Mr. Swaminathan. Four volumes came in, a final report came in, and nobody took any cognisance of that. There were about 202–203 suggestions in the report. None of the leaders had even read the report. Only one suggestion of substance was C2+50%, a comprehensive cost for crops. Before that, it was just A2+FL. And Swaminathan, along with the national commission of farmers, said that there has to be a comprehensive cost for two reasons: the capital costs must come in and the interest on capital must also be there. On average, one acre of land anywhere in India costs about 1 mln rupees. And if you take a 10% interest on that, it comes to 100,000 rupees. Which farmer is making 100,000 rupees on one acre of land? My point is, when you talk about capital cost, it also has to be on the instruments (equipment used in farming)… Small farmers don’t have tractor rotavators, but they have plough, and they have cultivators. All these things have to be taken into account along with the depreciation of equipment. The depreciation and the interest of the capital must be taken into account, then that is where you get a comprehensive cost.
Q. Didn’t the Swaminathan commission take all these into account in its report?
A. The commission took all these into account. But, the capital cost does not consider the intricate details. For example, if a person buys land and infrastructure, and starts a bread-making business, all those costs should be taken into consideration. Instead, if the government only considers the cost of raw materials such as yeast and flour, how will the person execute his/her business? Likewise, for the farmer, the infrastructure cost is not taken into consideration at all.
Q. The government has already said that on five crops, it is ready to give a guaranteed minimum support price for the next five years. So why are farmers not accepting it?
A. The government said if you diversify from wheat or paddy into these crops (maize, urad, arhar, masur and cotton), then we will buy them. What if the people are already sowing these and running into losses? As I said "niyat nahi hai" (there is no intenion). It's a matter of confusing people. The government should say one thing--we are going to buy the crops either way.
One more thing is, why should the exchequer be burdened? If we take the example of petrol in the last 10–15 years, prices have increased sharply. Is the government buying it and giving it to consumers? No. Likewise, for crops, why should the government buy them? Let the individual buy directly... Today what happens as such is that the middlemen are making all the money in the world.
Let me give you an example of two things that are very common all over the country. Potatoes and onions are consumed by every household. Potatoes are grown mostly in West Bengal, Uttar Pradesh, and Uttarakhand. Whereas, onions are basically grown in Gujarat, Madhya Pradesh, and mostly in Lasalgaon in Nashik, Maharashtra. Now, when these two vegetables come to the market, the farmer only gets three rupees, two rupees, and four rupees a kg. A lot of labour goes into that, including that of land and infrastructure. He can't even make both ends meet. The same potato and the same onions are sold for 40 rupees a kg. Who's making the money? Not the farmers. The consumer is paying what they have to pay. So, why can't we have that? Let's have a minimum price for the farmer and the maximum retail price for the consumer. We are an agrarian society. Why can't we work it out? If I had my way, I would have an agricultural planning commission in the country.
Q. Are you suggesting that the government should declare the minimum support price, but not procure it?
A. Absolutely. I gave the example of petroleum. The government fixes the rates, but the consumer buys directly from the outlets.
Q. The whole idea of procurement came on the basis of allegations that middlemen are exploiting farmers.
A. And they still are.
Q. So, how does the system work?
A. Let the middlemen be there. Let me give you another example. In 2013, I sowed Basmati 1121 variety of rice and made about 4,600-4,800 rupees per 100 kg. One and a half kg of paddy constitutes one kg of rice. So that means the price for the consumers would be 75 rupees a kg. However, it was being sold in the market for 85-90 rupees per kg in 2013. Two years later, the same paddy I sold for 1,400 rupees per 100 kg when prices fell. That means consumers should get it for 21 rupees a kg. But, it was still sold for 85 to 90 rupees a kg.
The middlemen should not buy crops below MSP. Simple. Let me give you another illustration. All over the country today there are almost 50 mln sugarcane farmers. They've always had a problem with sugarcane rates. The current government fixes a minimum selling price for sugar and nobody can buy the commodity for less than that price. In India, the minimum selling price of sugar was 31 rupees per kg, and now it has come to 33 rupees a kg. Nobody can buy sugar for less than that. Likewise, if they fix the minimum support price for other crops, they should just have to guarantee that nobody buys these commodities less than the MSP.
Q. So the government has decided to conduct a fifth round of talks with farmers. What kind of proposals the government has to come up with now for talks to be successful?
A. Firstly, the government needs to assess who to talk to. If there are 300 people who are involved and the government is only talking to a handful, then discussions are futile. Likewise, there are almost 1,000 farmers’ organisations in the country today. There are five primary groups. I started the agitation in 2020, and stepped back when there was an unnecessary ruckus surrounding the protests. Today, the five main groups are Samyukta Kisan Morcha (non-political), Samyukta Kisan Morcha, Gurnam Singh Chanduni (not involved in the current protests), pro-government groups such as Kisan Sangh/Kisan Morcha of the BJP, and the other one is our group, which has about 250 organisations. I suggest that the government should call members from all these groups and have a 25-member meeting. The discussions should be televised. Have the debate on camera and let the country see before the election whether farmers are right or not.
However, the fifth round of talks will only involve one group. What about the other four groups? There is a market intervention price mechanism for perishable goods and horticulture crops, which has been there for the last 40 years. But, does the government know about it? That is why I say, have a meeting with all the five groups. There are provisions for perishable goods. But, if the markets are lower than market rates, you have to intervene. Even the MSP can be clubbed with market intervention mechanisms. After the Russia-Ukraine War, market rates were so high for wheat that the government did not procure it. So, there's no weight on the exchequer. But, if prices are lower, the government should intervene to push the market up. The farmers want to create a frenzy. The government wants to create a bigger frenzy. Among all these, the country is going to suffer.
Q. The intervention will have to be in the form of procurement?
A. Not total procurement. Intervention will be in the form of raising rates. What is happening today? Suppose the demand for a particular commodity is only about 100 kg and supply is 120 kg. In such a scenario, prices will fall. But, what if the government was to intervene and buy 20%? It comes down to demand and supply, which is plain economics. We have to learn the art of farm economics today. Unfortunately, there are people and economists--I won't name them--they suggest to the government without knowing a thing about farming. And they go ahead and tell the government that this much will be the cost to the exchequer. I ask, from where are you getting these figures? Is the government going to dump everything in the Arabian Sea after buying it?
The government is importing pulses and edible oils from abroad. Instead, if it gives the same amount of money to farmers, they would grow it here.
Q. What is your view on the estimates by economists and research firm on the cost to the government?
A. As I said, this is a fragment of their imagination. Several economists give you several figures. I say there is no expenditure for the exchequer. There is no burden on the exchequer. Let’s take the example of the minimum selling price of sugar. What is the burden on the exchequer? Zero.
Q. Farmers have demanded India pull out of the World Trade Organization. Wouldn't that hurt farmers as well?
A. It is for the government to decide. As I said, to protect the interest of farmers, the government could impose sanctions or customs duties. We (the farmers) just want protection, that is all.
Q. What is your view on the demand for pensions for farmers?
A. This is one demand that I feel should be there. The Bharatiya Janata Party government had already accepted the pension scheme in Uttar Pradesh on Feb 6, just about 15 days ago. In the Budget, they said they would pay 3,000 rupees to senior citizens who are farmers. When you're doing it yourself, how can you blame somebody for demanding something like that?
Q. With all these, do you feel that the government should also ask farmers to pay income tax?
A. As many as 86% of farmers in India have farming lands of less than five acres. These farmers won’t even come in the bracket for paying taxes under the government’s tax structure. I do farming and I also file income tax because my income is over 300,000 rupees. I agree with you, where there is profit, it can be taxed in agriculture. However, if Indian farmers are only making losses in agriculture, and the next generation is heading off to other countries for better opportunities, how will they file income tax?
Q Do you think the farmers’ unions across the country are divided?
A. Unfortunately, the farming community is not very seasoned, it is divided into caste and creed. It is a different matter when people get into Hindu-Muslim debate, but earlier it used to be a topic of "jatt", "gujjar" and other things. Therefore, being the largest community, they don't even get what they deserve.
Q. How can you keep politics away from this?
A. Politics can never be away from this. We are a democratic nation. When we go and vote, we become a part of the political system. If some farmers say they are apolitical, that is nonsense. You are asking for support from a guy who is political, and calling yourself non-political. How do you say that?
Q. In November, you said farmers decided not to vote if a MSP law is not guaranteed by the government. Does that still stand?
A. A call will only have to be taken once the agitation ends. I am still very hopeful that there will be a breakthrough in talks with farmers. I suggest the government should call all the farmers' unions and throw open the cameras. Let the discussions be televised. The call in November was "no MSP, no vote", and we still have to take a call on that.
Q. Why this agitation now, when the government's term is about to end? Will its promises hold any value? Even if it does promulgate an ordinance now, the next government could very well let it lapse.
A. My perspective is that farmers could be thinking that the government gave them a commitment in 2020-21, which has not been fulfilled. So, they are agitating now because farmers want an ordinance from the current government before this year's elections in which it could bow. Even if this is an election year, bring out an ordinance before the country goes to polls. If the new government takes a call and says that the ordinance has to go and we will not finalise it, let them do it. I think this should be their (agitating farmers') perspective. This government should honour the commitment it gave to farmers. End
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