Farmers Agitation: Questions all parties must answer on Punjab & MSP

By: |
December 9, 2020 5:34 AM

Do the new farm laws really mean ending MSP, how do you fund extending this in a genuine manner to all crops?

An all-party meeting, nonetheless, needs to be called, to discuss the options ahead and the implications of whatever choice is made.An all-party meeting, nonetheless, needs to be called, to discuss the options ahead and the implications of whatever choice is made.

An all-party meeting on the Punjab farmers agitation, should the government call one, is unlikely to help resolve matters since most political parties seem to be united in the view that the Modi government erred in ‘rushing’ the farm laws through Parliament and without sufficient discussion. Indeed, it may not be too far off the mark to say the agitation has become a lightning rod for many of those opposed to the government. Apart from the sympathy that farmers usually get, many in the Opposition feel that since the government had no compunctions in riding rough shod over them, why should they try to bail it out now; a time-tested solution to the gherao of the capital would have been setting up an all-party meeting to suggest the way forward to protect farmer interests.

An all-party meeting, nonetheless, needs to be called, to discuss the options ahead and the implications of whatever choice is made. Putting a clause in the law to ensure that no trading can take place below the MSP is something both the farmers, as well as the Congress party has been suggesting. While that sounds reasonable, its implications can be huge since the BJP has followed in the footsteps of previous governments and periodically announced MSPs for 23 crops even though the reality is the MSP really works for just wheat and rice, and that too in just 3-4 states. FCI already has 30-40 million tonnes of extra wheat and rice that it is not able to dispose of and, given that mandi prices can be 20-50% lower than the MSP for most crops in most states—wheat and rice in states like Punjab are the obvious exception—making below-MSP trade illegal would pretty much bring private trading to a halt. In which case, agencies like FCI would have to step in to buy these crops, with an annual cost running into lakhs of crore rupees; how this is to be funded is a question that all parties need to answer—since the Centre clearly doesn’t have this kind of money—as well as the implications of this for India’s food inflation. If MSPs are too high, not only will this hit farm exports, it will hit exports of products—textiles, readymade garments—that are made out of agricultural commodities with consequent implications for job creation and farmer incomes.

Indeed, though the opposition to the farm laws makes it look as if sweeping changes have already been made, this is just the beginning and real reforms will include replacing subsidies with DBT transfers, greater emphasis on food processing, promoting cultivation in eastern India, far greater government investment in agriculture, etc; this is critical if farmer incomes are to be doubled, but if even building-block steps are reversed, how are farmers to be benefitted? It is not a coincidence that, with Punjab continuing to focus on wheat and rice, its agri-growth has plummeted below that of the rest of the country where higher value-add crops are being grown; and this does not take into account the environmental degradation with the water table in the state plummeting.

It is true it is not the Opposition’s job to make life easier for the ruling party, more so given the strained relations with the government; indeed, if it is true that many of those in the Opposition had in the past supported some of the very laws they are opposing today, the same holds true of the BJP when it was not in power. While that has obvious lessons for the BJP in terms of how to maintain relations with the Opposition, the latter need to keep in mind that, if they win the next general elections, they will be dealing with a situation where even the smallest reforms are easy to derail, where Dilli-chalo can become the rallying cry for any group looking to get its way.

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