Farmers' groups plan 4-month agitation to oppose Centre's MSP hike

Criticising the government’s recent announcement on hiking MSP of kharif crops for 2018-19 season as grossly inadequate and misleading, a clutch of farmers’ organisations has decided to hold a series of agitations over the next four months, starting with a march to Parliament on July 20 to “expose” the government’s claims.
The organisations under the banner of All India Kisan Sangharsh Coordination Committee (AIKSCC) have also decided to hold 400 meetings across the country over the next few months to expose what they called the government’s false promise of raising MSP and betrayal of promises made to the people.
ALSO READ: MSP hike in Kharif crops may dent India's farm exports in long term
“The MSP figures being claimed as implementation of Swaminathan Commission recommendations is blatant fraud on the farmers of the country. The Modi government's MSP for kharif is based on the same formula of A2 + Fl that was given by Manmohan Singh for rabi. This is entirely different from the demand of C2 costs + 50 per cent, which was also promised by the Prime Minister,” Avik Saha, co-convener of AIKSCC said.
He said the government hasn’t yet announced any plan to ensure procurement of crops for which MSP has been announced. “Only 6 per cent of farmers get the benefit of procurement. Only 28-30 per cent of wheat and 30-35 per cent of paddy is procured, while for coarse grains and pulses, the procurement is less than 1 per cent,” the leaders said.

ALSO READ: How will this double-digit MSP hike impact consumer goods and rural sales?
The groups also demanded that a private member bill to guarantee MSP as a legal right should be placed in Parliament at the earliest, which would ensure that every grain in the country must be sold at least on the MSP and failure to purchase the same by traders would invite penal action.
They also opposed any solution to launch price deficit scheme on the lines of Madhya Pradesh’s Bhawantar Bhugtan Yojana, saying that empirical evidence shows traders have taken full advantage of the scheme and have reduced the prices under the garb of the government paying the difference.
ALSO READ: Centre miffed with Jute Corporation over low scale of MSP operations
“The fallout is that the farmer has got less money than what he got last year and no difference has been paid to farmers who have not registered themselves,” the leaders said.
Agitations Lined up
Jul 20: March to Parliament to oppose MSP hike
Aug 9: Kisan Mukti Diwas
Oct 8-10: MSP Adhikar Andolan in mandis across the country
Nov 30 & Dec 1: Kisan Mukti Kooch to raise farmers’ issues
In the coming four months from August, agitating farmers will hold 400 meetings across the country to highlight farmers’ issues and protest against government claims.

FinMin presses agri ministry for reworking MSP procurement models

The central government had earlier indicated that funds would not be a constraint for fulfilling the key announcement of developing a foolproof procurement model for crops whose prices have fallen below the minimum support price (MSP). However, the finance ministry is learnt to have told the agriculture ministry that it would not be possible to bear any annual expenditure above Rs 200-250 billion in the long run.
At a meeting held three weeks ago, senior policymakers in North Block told officials from the agriculture ministry that the latter needed to rework its proposal with regard to funding and methods of procurement.

“The projections that the agriculture ministry has made are, in our view, over-estimated. There were gaps in the proposal, on funding, methods of procurement, the system of procurement, which options are workable, or not. These were pointed out to them. We are awaiting a workable proposal from them,” said a senior official.
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“They had given a number which they themselves said was at the outer limit of their estimates,” the person said, adding that the amount sought was higher than Rs 250 million.
Another official said that NITI Aayog has also been directed to re-work some of the models of procurement suggested by them, and also carefully evaluate all the proposals for their financial implication, as launching any programme which could have a huge financial burden might be difficult to handle.
“It’s a commitment of the government so we are bound to meet that, but there has to be a realistic assessment of costs involved and also the process in which this could be done,” the second person said.
He said whatever be the methodology, it would be difficult to sustain an expenditure which is more than Rs 250 billion per year, while the proposals put forward by both agriculture ministry and NITI Aayog total nearly Rs 300 billion.
Government would move ahead with the scheme only after proper clarity is obtained and all pros and cons of the three models suggested by NITI Aayog and agriculture ministry is properly evaluated. It is also planning to commission a high-powered study by a reputed agency to study Madhya Pradesh’s Bhawaantar Bhugtan Yojana (BBY) – one of the models suggested by the Aayog, as an option to direct procurement.
Under the Bhawaantar Bhugtan Yojana of Madhya Pradesh government, the state pays a portion of the loss suffered by farmers for selling below the MSP capped up to a limit.
Madhya Pradesh started the scheme from the 2017 kharif season and was planning to carry it on during the next rabi season as well, but had to abruptly withdraw the main commodities after the Centre declined financial support, awaiting a formal national roll-out. The scheme was being studied by other states as well and had been riddled with allegations of malfunctioning and hijacking by traders.
The other model which the Central government is trying to push is a more direct model of purchase where states are free to purchase commodities if prices fall below MSP, while the Centre shares a portion of the loss. Referred to as the Market Assurance Scheme (MAS), this scheme gave operational freedom to states to intervene in the market in case of a fall in prices.
Finance Minister Arun Jaitley in his 2018-19 Budget speech, while announcing that henceforth, all MSP would in-principle be fixed at 50 per cent more than their cost of production (A2+FL) also directed the NITI Aayog to finalise a procurement model which would ensure that maximum farmers get the benefit of MSP.
Accordingly, the NITI Aayog has come out with a concept paper that highlights three models of procurement that include MAS, Price Deficiency Payment and also procurement by private agencies. The paper was finalised after extensive discussion with states.
Under the MAS, according to NITI Aayog paper, the expenditure could be something in between Rs 405 billion to Rs 540 billion annually, depending upon the extent of loss shared, while under the Price Deficiency Payment scheme, the expenditure is expected to less than Rs 300 billion. However, Central government officials said that the expenditure could be much less somewhere around Rs 200-250 billion. The third model which is also being discussed is active involvement of private players to procure at MSP. The private parties would be selected through a transparent process.