IASbhai Daily Editorial Hunt | 4th Dec 2020
“Dream big and dare to fail.” – Norman Vaughan
EDITORIAL HUNT #275 :“Why MSP is Backbone of Punjab and Haryana Farmers ?”
Why MSP is Backbone of Punjab and Haryana Farmers ?
C.S.C. Sekhar is Professor of Economics, Institute of Economic Growth, University of Delhi
In farmers’ protests, the core is procurement
Farmers of Punjab and Haryana need the MSP-procurement system, but the government needs it even more for the PDS
SYLLABUS COVERED: GS 3 : Agriculture
How MSP plays an vital role in procurement needs of Punjab and Haryana’s farmer ? Do you think the procurement policy in these states need a push ? -(GS 3)
- Worries and the Protests
- Epicentre of Unrest
- MSP is the lifeline
- Why these states matter
- Way Forward
- AGRARIAN REVOLT : Farmers’ protests have erupted once again in north India.
- WITHDRAWAL OF MSP : Their main worry is about a possible withdrawal of the Minimum Support Price (MSP) and a dismantling of the public procurement of grains.
- CRONY CAPITALISTS : They also contend that by leaving farmers to the mercy of the open market, the stage has been set for large private players to take over agriculture.
EPICENTRE OF THE UNREST
- MYTHS DEBUNKED : New Delhi claims that the Acts will only increase options for farmers in the output markets, that the MSP-procurement system will continue, and that there is absolutely no plan to dismantle the system.
- MSP WAS NEVER ALTERED : To support its claims, the state points to the fact that there is absolutely no mention of either MSP or procurement in the Acts.
- CLAIMS ARE REAL : The state’s claim that there is no mention of MSP-procurement in the Acts is true.
- ONGOING PROCUREMENT : It is also true that a large-scale public procurement of paddy is going on in Punjab as the protests are raging.
IT IS THE LIFELINE HERE
- LIFELINE OF AGRARIAN STATES : The Public Distribution System (PDS) is the lifeline in these States.
- ASSURED MINIMUM PRICE : Farmers in Punjab and Haryana are heavily dependent on public procurement and assured price through MSP.This is far greater than farmers in any other State.
- NET PROCUREMENT : Nearly 88% of the paddy production and 70% of the wheat production in Punjab and Haryana has been absorbed through public procurement previous year.
- A CONTRAST : Other major paddy States such as Andhra Pradesh, Telangana, Odisha and Uttar Pradesh, only 44% of the rice production is procured by public agencies.
- HEAVY DEPENDENCE ON MSP : This clearly shows the heavy dependence of farmers in Punjab and Haryana on MSP and the public procurement system.
- FINAL RESORT : In a sense, this system has been the lifeline of these States.
- CHAOS OR INTERRUPTION : It is conceivable then that any disruption to the system, real or perceived, will cause a major upheaval.
VARIATION IN MSP RATES
- STATE NEEDS PROCUREMENT TOO : What is missed in this scenario is that if farmers of Punjab and Haryana need the procurement system, the state needs it even more.
- CARDINAL OBLIGATION : This is because of its obligations under the PDS and the National Food Security Act (NFSA).
- HUNGRY STOMACHS : There are nearly 80 crore NFSA beneficiaries and an additional eight crore migrants who need to be supported under the PDS.
- NEAREST RESOURCES : The government needs an uninterrupted supply of grain, particularly from these two States, to maintain the PDS.
- MSP VS PDS : In the last three years, nearly 40% of the total paddy production in the country (45 million tons) and 32% of wheat production (34 million tons) has been procured by public agencies to supply the PDS.
- PROCUREMENT IN 2020 : This year, due to the onset of the novel coronavirus pandemic and the migrant crisis, the government has earmarked much larger quantities for public distribution .
- GROSS PROCUREMENT : This translates into nearly half of the rice production (49%) and 35% of the wheat production in the country.
COMPARISON OF WHEAT VS PADDY MSP
- MSP A MUST CHOICE? : This implies that the government needs to procure a huge quantum of grains than in previous years as the government cannot afford to go to the open market.
- RECIPE OF DISASTER : That is a sure recipe for disaster as prices will skyrocket, and with the stock restrictions gone under the recent Essential Commodities Act Amendment, there is a possibility of large-scale hoarding too.
WHY THESE STATES MATTER
- MAJOR SUPPLIERS : If the state intends to procure such huge quantities of grains, then these States that have always been in the forefront in supplying grains to procurement agencies.
- TOTAL GRAINS PROCURED : Also, nearly 50% of the total coarse grains came from these two States.
- DISMANTLING MSP’S : It is clear that dismantling the procurement system is neither in the interests of farmers nor the state.
- WORDS OF ASSURANCE : Therefore, it is imperative that the government reaches out to the farmer groups and assures them of the indispensability of MSP-procurement system.
- FURTHER LEGISLATION : Apart from addressing the core issue of the MSP-procurement system, many more improvements are needed in the Acts.
- NEED FOR A REGULATORY MECHANISM : The absence of a regulatory mechanism (to ensure fair play by private players vis-à-vis farmers) can create havoc at a later stage.
- LACK OF TRANSPARENCY : The lack of transparency in trade area transactions are two of the major limitations that need to be addressed immediately.
- TRUST DEFICIT : The severe trust deficit that resulted from the way the Farm Bills have been rushed through needs to be addressed by adopting a conciliatory approach towards farmers and the States.
SOURCES: THE HINDU EDITORIAL HUNT | Why MSP is Backbone of Punjab and Haryana Farmers ?