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Why there is need for legally dedicated Minimum Support Price ( MSP) for Agri Produce in India?

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Under present system only Government is obliged to buy Farm Produce on MSP but Trader is Not


Let us have a brief look at the socio economic status of the farmer community in India and the policy on Minimum Support Price (MSP) that we have and may need in India. India is the seventh largest country in the world with an area of 3.288 million sq kms. As per Report of committee on Doubling Farmers income Part II 2017 absolute number of households engaged in agriculture by 2011 had risen to 11.9 Cr from just 7 Cr in 1951 and number of the landless agricultural labour had increased to 14.43 cr from just 2.73 cr in 1951.As per Handbook of Statistics on Indian Economy 2023 area under food grains cultivation in India in 1966-67 was 1153 Lakh Hectares and that in 2022-23 ( advance estimates) it was 1322 Lakh Hectares. Similarly there has been very significant increase in crop yield which was for Food Grains just 644 Kg / Hect in 1966-67 and per third advance estimates increased in 2022-23 to 2500 kg / Hect. Similarly Total Food Grain Production for 2003 -04 was 213189.0 thousand metric tons where as in 2022-23 Total Food Grain Production was 330.5 million metric tons. In year 2023, India’s estimated production of rice was over 130 million metric tons and that of Wheat was estimated to be over 112 million metric tons. In 1950s Agriculture sector’s contribution to Indian economy was more than 50% of GDP where was in 2015-16 it was 15.4% (at constant prices) which was ofcourse due proportionately larger growth in other sectors of economy and not due to bad state of overall growth in agri sector although the condition of large bulk of agri community did not become economically that secure due to very small individual holdings. But ‘Agriculture’ still in 2024 remains the mainstay of Indian economy and major source of livelihood of rural household, predominantly for small, marginal farmers, landless cultivators as also farm labour. No doubt for securing the food and ‘health’ security for self a very large farmer community ,dependent particularly on food grain cultivation, face several problems related to, farm input supplies, proper & fair marketing cover.
It is not out of place to mention here that although world food production has increased over the years but still almost 800 million people have insufficient food in South and Southeast Asia, the Caribbean, and Sub Saharan Africa (FAO,2015) where as India has sufficient production of food grains (ofcourse fruits and vegetables too ) worth local needs. Whereas but due to poor economic conditions may be over 50 percent population does not have adequate buying capacity for minimal food / nutrition and a large population in that also comprises of farm labour/ landless farmers/small & marginal farmers owning no agri land or land less than 2 hectares (India’s foodgrains production touched a record 315.7 million tonnes in 2021-22 despite climate change challenges says the Economic Survey 2022-23 tabled in the Parliament by the Union Minister of Finance and Corporate Affairs Nirmala Sitharaman on 31st Jan 2023 who further said that The production of pulses has also been notably higher than the average of 23.8 million tonnes in the last five years and According to third advance estimates (2021-22). A production of 342.3 million tonnes in an area of 28.0 million hectares was achievable. To remove the financial burden of the poor, the government will spend more than Rs 2 lakh crore in this period on food subsidies under NFSA and other welfare schemes said the Survey ( 2022-2023). The Indian Finance Minister told Lok Sabha on 31 Jan 2023 that Government has decided to provide free foodgrains to about 81.35 crore beneficiaries under the National Food Security Act (NFSA), 2013 for one year from 1 January 2023 ( any how after that govt has decided to go with it for five yrs).
It has been on 14 March 2023 that Union Agriculture and Farmers Welfare Minister Shri Narendra Singh Tomar speaking after launching the Kisan Tak channel and its website of the India Today Group in New Delhi said that Small Farmers constitute 85% of the farming community who face challenge of lack of private investment and that Rs.2,40,000 crore has been disbursed through PM Kisan Samman to 11.5 crore farmers @ INR 6000per family per year since 2018.
As per some estimates in India small and marginal land holding farmers cultivate around 44 per cent of the area, and they produce around 49% of rice, 40% of wheat, 29% of coarse cereals & 27% of pulses and over half of the country’s fruits and vegetables production (Agricultural census, 2014). As per India’s Agriculture Census 2015-16, 86.1 percent of Indian farmers are small and marginal (SMF) and more than half of these live in five Indian states of Uttar Pradesh, Bihar, Madhya Pradesh, Maharashtra and Andhra Pradesh where most of them cultivate the classic combination of cereals i.e., paddy in Kharif (and even in Rabi in some cases) and wheat in Rabi. Cotton is the third most preferred crop, followed by maize and gram (NSO 2018-19).
As per PIB report of March 2024 National Sample Survey Office (NSO), Ministry of Statistics and Programme Implementation (MoSPI) study on Situation Assessment Survey (SAS) of Agricultural Households during (January 2019- December 2019) in the rural areas of the country the percentage distribution of agricultural house holds ( small & marginal farmers ) owning less than two hectares of land was as large as 89.4%.
The agriculture censuses show that number of India’s landholdings grew from about 71 million in 1970-71 to 146 million in 2015-16 with average landholding sizes shrinking: from 2.3 hect to 1.1 hectares in 2015-16 with only 47.3 percent of India’s operational agricultural land with India’s SMF where as land with SMFs was about 21 percent in 1970-71.As per another quote only 45 percent of the total cultivable land is held by small & marginal farmers. Government of India extended PM Samaan Nidhi of Rs,6000 per year w.e.f 01 Dec 2018 (with cutoff date as 01.02.20’19 for 5 years), since 1-6-2019 its benefits were extended to all farmer families irrespective of the size of their landholdings ( nearly 11 Cr ) except tenant farmers who cultivate land owned by others as also some families where one or more members come in particular categories. To Rajya Sabha Unstarred Question No. 192 answered on 03/02/2023 from Iranna Kadadi in reply the Minister of Agriculture and Farmers Welfare (Narendra Singh Tomar) had told that no specific census/survey of landless agricultural farmers and migrant landless agricultural farmers has been conducted and as such the exact number of landless agricultural farmers and migrant landless agricultural farmers in the country is not available. These categories of ‘farmers’ too are economically the poorest.
All these indicators which well speak of the likely weak /poor economic status of a large bulk of Agri community in India who are compelled by their family needs for rushing to market for immediate recovery of sales and are exploited by traders to sell their produce much below even MSP declared by government for purchase by government nominated agencies. So is felt the need for a legally dedicated Minimum Support Price ( MSP) for Agri Produce in India.
To be continued
(The writer is a Sr Journalist and Social Activist).

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