MSP a bold step for farmers’ benefit; implementation a challenge

Rohit Chandavarkar
Thursday, 5 July 2018

While the move is expected to boost the rural economy, there are concerns that it could translate into food inflation

The government has taken the bold step finally of announcing Minimum Support Price (MSP) of 150 per cent of production cost to the farmers.

This was promised to the farmers of the country by Prime Minister Narendra Modi and was seen as a big challenge to achieve. The prime minister himself admitted in some interviews given to certain media brands in the last few months that the crisis in the agriculture sector still remains an area of concern and some steps will have to be taken urgently to solve the crisis.  

The structure announced on Wednesday by the Union Cabinet would sound quite encouraging for the farmers all over India and it would perhaps give them a guideline on what crops should be sown in view of what price is being offered. As a policy initiative, this is something that should be welcomed. The challenge, however, will be to implement this on the ground in each district and tehsil of the country and to ensure that the benefits really reach those who deserve it.

The MSP is like a buffer provided by the government to save farmers from any sudden fall in produce prices. The MSP is a guaranteed price for their produce. In February, Finance Minister Arun Jaitley while presenting his fourth budget in the Modi government, promised to set MSP at 1.5 times the cost of production.

The cabinet announcement of this initiative indicates that the BJP has now started preparing for the General Elections season. 

Last year saw massive protests by farmers’ associations across the country over MSP and loan waivers. It started last summer in Madhya Pradesh, where six farmers were killed in police firing and spread to other states where farmers destroyed fresh produce in symbolic protest.

In March, it took shape of the colossal Kisan Long March in Maharashtra, in which around 50,000 farmers walked 180 km from Nasik to Mumbai.

Last month, farmers across the country held a 10-day ‘Gaon Bandh’, during which thousands refused to send the supply of fruits, vegetables and dairy products to cities.

Also, by the end of this year, assembly elections will be held in three BJP-ruled states - Rajasthan, Madhya Pradesh and Chhattisgarh - where farmers, already restive, form a chunk of the population
The delay in the implementation of a big hike in support prices -- one of the pre-election promises of the BJP -- has triggered huge protests by farmers in many parts of the country. They also had the support of the opposition, which has highlighted farmers’ suicides to accuse the government of being insensitive to farmers’ demands. 

While the move is expected to boost the rural economy, there are concerns that it could translate into food inflation. How the MSP promise is now implemented on the ground in each state of the country remains to be seen.

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