India’s farmers continue to face severe difficulties in marketing their produce despite MSP for major crops. Without being legally enforceable, MSP has become a paper tiger and its fixation, a routine ritual. The small farmers face the problem much more because they have an urgent need for cash. Middlemen are many and they have been active in an imperfect marketing system. That MSP lacks legal enforceability has been a lacuna.
By and large, MSP arrangement leading to Government purchase has been implemented in varying degrees among states and it has been mostly limited to rice and wheat. In Odisha, for example, it is common knowledge that most small farmers sell paddy to itinerant traders at their doorstep soon after harvest and at rates much lower than MSP. National level cooperatives make some purchases of pulses but there have been instances where they sell it at much lower prices.
Token market intervention by the state has not yielded the desired results nor has it ensured every stakeholder is MSP-compliant. As a result, it is the farmer only who has suffered. That farmers’ suffering has remained largely muted is because the farmers mostly have remained disorganized. Occasional government sops in the shape of cash through DBT have not addressed the persisting deficiency in marketing. Making MSP legally enforceable may be a solution but it should not create a legal compulsion on the government to purchase the crops. There is a need for appropriate law that addresses these issues.
Today we are importing edible oil to the tune of nearly 56% of our requirement of about 25 million tons. Our imports are mainly palm oil (55%) followed by Soybean and Sunflower oil. While palm oil is sourced from Indonesia, Malaysia, and Thailand, Soybean oil is sourced from Argentina and Brazil. Sunflower oil is imported from Russia and Ukraine. Imports of edible oil in 2021-22 were worth Rs 1.57 lakh crores-- it’s huge money that we spend importing. We aren’t self-sufficient in pulses either. Our overall pulses production increased from 22 million tons in 2018-19 to 27.81 million tons largely on account of the increase in the production of gram. In FY 2023 our imports of pulses were worth Rs 15780 crores, Tur (Harad) import in 2022-23 was 8.75 lakh tons while import volume of Lentil (Masur) was 7.73 lakh tons, and of Urad (Biri) 5.12 lakh tons. Moreover, 90704 tons of Rajma were also imported. Major supplies in FY 2023 were from Myanmar (7.58 lakh tons), Canada (4.85 lt), Mozambique (4.66 lt), Australia (3.62 lt) Tanzania (1.69 lt). Some quantities were also sourced from Brazil, Malawi, Sudan, Ethiopia and UAE.
Our farmers need to resort to crop diversification to rectify the prevailing dependence on imports. Paddy farming in Punjab has resulted in widespread depletion of groundwater. The water table has gone down to an alarming level. Pumping water for greater depths for paddy crop now means much higher use of electricity and resultant subsidy. More lands are now less productive. There is an imperative need for farmers to prevent an ecological disaster.
The Centre has proposed to the agitating farmers a plan in which agencies like the Cotton Corporation of India, NAFED, and NCCF would buy cotton, pulses, and maize crops at minimum support prices (MSP) for five years after signing an agreement with the farmers. This seems to be a step in the right direction. Though the farmers have not accepted it, the idea should be further discussed by both parties with an open mind and a solution should be found.
Big private players in Agri-Business must be a part of a national endeavour to make MSP a reality by formally agreeing to procure a mutually agreed quantity of selected major crops at MSP. The government should work towards that end.
By Author- Prasanna Mishra
(DISCLAIMER: This is an opinion piece. The views expressed are the author’s own and have nothing to do with OTV’s charter or views. OTV does not assume any responsibility or liability for the same.)