narendra modi
India Politics

Modi cabinet likely to approve biggest hike in MSP for paddy today

The Union Cabinet is likely to clear a new Minimum Support Price (MSP) of all Kharif crops for the 2018-19 season today, a move that many see as the Narendra Modi government’s efforts to woo the farmer community of the country ahead of crucial elections.

If sources are to be believed, the Centre is all set to announce the new MSP of all Kharif crops. The biggest announcement is expected to be for paddy growers who are likely to get a hike of Rs 200, which means the MSP of the common variety of paddy may increase from the current Rs 1,550 per quintal to Rs 1,750 per quintal.

With a 50 per cent profit for farmers, the BJP hopes to position itself as a pro-farmer party as this could be the highest hike ever in a single year for paddy.

Prime Minister Narendra Modi on Tuesday met agriculture minister Radha Mohan Singh and other officials of Niti Aayog to provide the final shape to a long-promised move of the Bharatiya Janata Party that it hopes will correct the party’s standing among the large farming community in the country.

Even the meeting that was held Tuesday evening drew the fine print of a hike in MSP of paddy and several other Kharif crops that the Cabinet is likely to clear today.

The Union Cabinet is expected to bring the MSP of over a dozen crops to a level which will provide farmers a profit of minimum 50 per cent over the cost of production. PM Modi will be following up on the promise made by the government in the last budget-something he reiterated by him recently after a meeting with cane farmers in Delhi.

Since MSP hikes in the past have never percolated down to the farmers fully, the government plans to back the increase with a procurement mechanism. Sources said that the idea is to ensure that most farmers are benefitted with the MSP.

“There is empirical data to prove that in the past, the hike in MSP has had restricted benefit. It is the big farmers with their economies of scale who end up as prime beneficiaries of the hikes,” said an agriculture ministry official.

The hike, government sources said, is in line with PM Modi’s promise to double farm incomes in a stipulated period of time. The hike and the improved procurement formula in an election year is aimed at states beyond Haryana, western Uttar Pradesh, parts of Gujarat and Maharashtra, Punjab and the southern states.

The government’s promise to hike the MSP to bring 50 per cent profit, however, has not enthused farm activists who have dismissed the MSP hike plan as ‘too little, too late’. They claim that the MSP hoke is based on assessment of costs involved which do not include the cost of the land.

The argument is that in India, a large number of farmers, especially in agrarian states, till rented lands. They pay the cost of the inputs and the rent for the land. Land rents, in fact, vary across states.

“The rent paid by a farmer near Chandigarh is different than what is paid by a farmer in Easter UP. Since there can’t be an average price fixed, it had to be left out,” Niti Aayog Vice Chairman Rajiv Kumar said.

This essentially means that the profit built into the MSP may vary from state to state. In states with low rent of land, farmers may technically end up earning more.

The agriculture ministry in April had three proposed models ready. One, titled ‘Price Deficiency Procurement Scheme (PDPS)’, is similar to the Bhavantar Bhugtan Yojana started by the Madhya Pradesh government after the Mandsaur protests last year. Under this policy, farmers would be compensated to the difference between the MSP and the actual price, subject to certain conditions.

The others were Market Assurance Scheme (MAS), Price Deficiency Procurement Scheme (PDPS) and Private Procurement and Stockists Scheme. A group of ministers headed by Home Minister Rajnath Singh had finalised this policy.

It’s unclear what’s on the table for the Cabinet meet today but the aim of the agriculture ministry is to create a slew of policies and give the states the freedom to pick a policy which suits them the best.

However, farm rights activists have pitched their hopes on their demand for a “right to remuneration” for farmers. They claim that the MSP and the procurement system will never have the penetration that will benefit the small and marginal farmers; hence, they want a universal right to procurement and returns for farmers which will require a legislation and time.

Ahead of crucial elections, the government is short on time and is going ahead full-steam with the MSP formulae.





News credit : Indiatoday

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