New Delhi:
The standoff between the government and protesting farmers entered a second week on Monday, with no definitive breakthrough after four rounds of talks but signs of an agreement on the horizon.
At a meeting late on Sunday, the government – faced with a second round of farmers' protests, this time just weeks before the general elections – relented on the issue of MSP, or minimum support price, and proposed a five-year contract for the purchase of pulses, maize , and cotton. The farmers – for whom MSP is a red flag – asked for and were given 48 hours to deliberate and have put 'Delhi Chalo 2.0' on hold.
A legal guarantee for MSP is seen as number 1 on farmers' wish list.
The two sides met in Chandigarh with the government being represented by three union ministers, including Commerce Minister Piyush Goyal.
However, the early signs are not encouraging: farmer leaders tell NDTV that the government should provide guarantees on all 23 crops, and not just dal or maize. Those from Punjab – where a large section of the protesting farmers come from – have pointed out that their share of growing pulses or maize is low anyway.
“There is no benefit to Punjab and Haryana farmers from this incomplete proposal.”
Farmers' government agree on MSP?
In summary, the following points emerged from the meeting in Chandigarh.
- Union cooperative societies such as NCCF, or National Cooperative Consumers Federation, and NAFED, or National Agricultural Cooperative Marketing Federation of India, will sign a five-year contract to purchase dal or maize
- Under this contract, the above crops will be purchased from MSPs.
- There will be no limit on purchase quantities and a website will be created.
Mr Goyal said the offer is part of a long-term strategy to increase maize production “as a key feedstock for grain-based ethanol supply”.
READ | The Center's five-year formula for farmers for a crop price safety net
It will save Punjab's agricultural sector, improve groundwater levels and prevent land – already under pressure – from becoming barren, he explained. The government — which is trying to encourage maize and dal is part of its 'crop diversification' — set the maize MSP at Rs 2,090 per quintal last year, compared to Rs 1,760 in 2019.
Concerns about groundwater have also been expressed in the past; in November last year, the Supreme Court warned Punjab to take measures, including switching to maize. This took place in the context of a hearing on air quality pollution – caused by the burning of agricultural waste (paddy waste) – in the Delhi region.
READ | “We have asked for MSP guarantee for purchase of pulses”: Bhagwant Mann
In 2022/2023, an estimated record 346.13 million tonnes of maize were grown.
Current MSP scheme
Currently, MSP is offered for 23 crops, excluding staple crops like paddy, wheat, pulses and maize. These include ragi, groundnuts, soybeans, sunflower seeds, barley, rapeseed and mustard.
The 2023 prices were announced in June, when MSPs for kharif crops were increased – and set at a level at least 1.5 times the weighted average cost of production for all India – “to ensure remunerative prices for their produce and encourage crop diversification”.
The MSP demand of farmers
Besides legal support for MSPs, the farmers want the Swaminathan Commission's recommendations to be implemented, as well as a pension for farmers and farm workers.
The Swaminathan Commission's recommendations on MSP are worth mentioning as they suggested fixing the floor price at least 50 percent above the weighted average cost of production.
READ | What are the main demands of farmers that are still unresolved?
This is known as the C2+50 formula, which factors in capital costs and land rent when setting MSPs.
The umbrella farmers' organization behind this round of protests, the Samyukt Kisan Morcha, has indicated that it is not prepared to accept anything less than this formula.
What is MSP?
MSP is a form of market intervention and refers to a package set by the government to protect farmers from a sharp fall in crop prices; for example, during a record harvest, when prices plummet.
Essentially, the government buys a quantity of certain crops every year, the list and prices of which are announced before sowing. The aim is not only to offer farmers a minimum return on (part of) their investments, but also to purchase crops for the government's public distribution system.
The MSP is the floor price, i.e. the minimum at which a crop can be purchased in the market.
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However, MSPs have no legal backing, meaning the government is not obliged to buy, for example, 10 percent of a farmer's rice crop at the floor price. And this is exactly what the farmers want to change.
The row over MSP made headlines four years ago after the second of the Modi government's three 'black' laws, which were scrapped after the 2020/21 farmers' protest. This law – the Farmers (Empowerment and Protection) Agreement of Price Assurance and Farm Services Act – said crop prices would be determined by market forces – i.e. farmers would get more for the crops they wanted.
However, the farmers felt that this would do away with the MSP feature by default.
The government tried in vain to allay these fears.
Other demands from farmers
Meanwhile, the farmers also want debt waivers, no increase in electricity tariffs and withdrawal of police cases filed during the 2020/21 protests when they had violent clashes with security personnel.
Finally, they also want justice for the farmers killed in Lakhimpur Kheri in Uttar Pradesh, restoration of the Land Acquisition Act and compensation for the families of those killed four years ago.
Where are the farmers now?
Protesting farmers are now camping about 200 km from Delhi, with multiple fortifications and barriers – from concrete blocks and barbed wire to spike strips and metal barricades – in their way.
They are being held for now at the Shambhu border crossing between Punjab and Haryana.
READ | Police use tear gas against farmers at the Punjab-Haryana border
The protest started last week; a small crowd in Shambhu was tear-gassed by Haryana police officials, who fired more than 20 grenades in a warning volley. However, since then the situation has been calm.
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