The government and farmers need to remain engaged to find a meeting ground on the minimum support price formula and the number of crops to be procured by the government. The government has shown flexibility by offering to include maize, cotton and pulses (tur, masoor and urad) among crops to be bought at the MSP. Farmers need to show similar flexibility by scaling down their demand for the 23 crops to be bought at the MSP.
The farmers demand that the MSP be calculated by the Swaminathan Commission’s formula of C2+50 percent (where the comprehensive production cost includes family labour and land rent). The government has offered the A2+FL+50 percent formula (production cost incurred in cash, such as expenses on seeds, fertilisers, pesticides, transportation, irrigation and electricity, plus family labour).
This new formula is an improvement on the current one as it offers to include the value of family labour into the input cost. It, however, does not include land rental and opportunity cost, which are part of the Swaminathan formula.
At the core of the standoff is the demand to ensure remunerative prices by controlling price fluctuation in the market. Farmers want the government to purchase their produce at a remunerative MSP and not leave them to face the market’s vagaries. In the current Rabi season, the prevailing price of mustard is lower than the government MSP.
When the current crop of mustard is harvested in March-April and reaches the market, the farmer will be forced to sell it at a price lower than the MSP. This is why the farmers are insisting on buying 23 crops at the MSP. The government currently buys only wheat and rice at the MSP.
The market may not have a solution to the farmers’ problems. This is also borne out by the fact that farmers of highly market-driven countries of Europe are also on the streets protesting non-remunerative prices.
The government has shown its willingness to engage with the farmers. Apart from addressing their concerns, the government also has to protect the interest of the consumers. It had formed a committee after the 2021 agitation to explore ways of guaranteeing MSPs.
This committee has not been able to give any concrete suggestions. The two sides need to remain engaged, because the solution will emerge from discussions, not street fights.
