Express View on farmers-Centre talks: Keep the door-open
Farmer unions have rejected the Centre’s offer of assured minimum support price (MSP) linked to the cultivation of pulses, maize and cotton, which are less water-consuming crops than paddy, wheat and sugarcane. The unions’ decision is disappointing. Farmers — not just in Punjab and Haryana, but even MP and Telangana — have a point when they say that they have little incentive today to grow maize, pulses, oilseeds or cotton in the absence of proper MSP procurement by government agencies. This is unlike in paddy and wheat, where the government has to Procure in order to meet the requirements of the public distribution system . There’s no similar outlet for most other crops, in which case the likes of Nafed and Cotton Corporation of India would have to sell the procured produce in the open market. The losses booked, if any, would then have to be borne by the Centre. Alternatively, the Centre could simply pay the difference between the market price and MSP for these commodities, and credit this directly into farmers’ accounts.
Either way, the idea — linking MSP to crop-diversification and procurement with no quantity limitations — is welcome. But it hasn’t helped break the ice between the government and the unions, which are seeking a “legal guarantee” for MSP in all crops. That’s an unreasonable demand, not the least because national elections are less than two months away. Enactment of any law to make MSP mandatory can be made only by the next, not current, government. Secondly, the government can “guarantee” MSP only on the crops and the quantities it procures. It cannot force private traders to pay any price above the supply-and-demand determined rate. The very fact that the government is ready to undertake open-ended MSP procurement of pulses, maize and cotton is something the unions should view as an opportunity. India is short in pulses and needs to produce more maize (for both livestock feed and as bio-fuel) and cotton (for fibre, oil and meal). And yields of these crops would be higher when grown in Punjab and Haryana.
The use of MSP for crop diversification will work better if the Centre stops open-ended procurement of paddy and wheat, along with a phase-out of water, electricity and fertiliser subsidies. This newspaper has consistently advocated a minimum income support — MIS, not MSP — for farmers. This can be in the form of per-acre or per-farmer direct benefit transfer. MSP procurement should be deployed only for limited purposes such as supplying the PDS or encouraging the cultivation of specific crops. As a general tool of farmer welfare, it would be a fiscal disaster. The Centre needs to do more spadework to explain this to the farmers but the trust deficit doesn’t help. That’s why, after the breakdown of talks late Monday, the government needs to keep the door open, frame the negotiations in a manner that assures farmers their welfare is the key imperative of any change in policy. In the run-up to the elections, its task is cut out .