Farmer Protests: 'MSP costing government Rs 10 lakh crore is misinformation'

Leading food and agricultural policy expert, researcher and writer Devinder Sharma asks why a section of the media and the urban middle class see protesting farmers as the ‘other’, and why many of us find it difficult to accept that even rural India deserves to be prosperous
Devinder Sharma has been fighting for farmers' rights for several years
Devinder Sharma has been fighting for farmers' rights for several years

Farmers are back on the march, and the government as usual is back on the defensive while TV channels and newspapers are full of experts explaining why the farmers’ demands are unrealistic and impractical. 

Their reasons range from - ‘India simply doesn’t have enough money’, to ‘where are the warehouses required to store all that produce?’

There are also those who oppose it on ideological grounds -- ‘Why should the farmers be insulated from the vagaries of the market?’,  ‘Linking their income to demand and supply will encourage productivity and innovation’ and so on. Minimum support prices and public procurement, they point out, are Soviet-era tools that have been proven to be inefficient and useless.

Yet, amid all this, author, researcher, farmers' rights activist and former journalist Devinder Sharma stands apart as a voice staunchly in support of the agitating farmers.

Sharma, the author of books such as GATT to WTO: Seeds of Despair and In the Famine Trap, spoke to The New Indian Express on why he supports the farmers’ demand for MSP, and addressed the various objections against it.

Q - The biggest objection to the demand for MSP is that we don’t have enough resources. Government sources claim that implementing the MSP scheme will cost Rs 10 lakh crore per year, equal to our total expenditure on infrastructure. Similarly, they argue that the government doesn’t have the warehouses to procure all agricultural items, only grains and pulses. How do you address these objections?

A - I am not asking the government to procure everything. That’s a kind of an illusion they are creating, to create a fear-psychosis. 

We are saying, make MSP a legal instrument. This does not mean that the government will procure everything.

MSP will be a benchmark price below which nobody will purchase, whether it’s the agent, private traders or public agencies. So, the government doesn’t have to come into play. Only at certain times, government's intervention may be required.

Q - How exactly will this system work? What happens when there’s too much produce in the market and there are no takers for the excess produce at MSP? Who will buy the excess produce?

A - When such a situation takes place and farmers are not able to sell their produce, the government must pay the farmers.. That’s an intervention that is required. Even in a country like America, when the milk is surplus, what do they do? They feed it again to the cows or throw it, but farmers are paid. They also ask farmers to convert it into cheese which is distributed in the schools or sold. The government compensates farmers in such cases.

Q - Where will we get Rs 10 lakh crore from?

A - [The figure of Rs 10 lakh crore] is misinformation. The government doesn’t have to purchase everything that is produced in India. It has to step in only when prices crash and farmers are forced to sell their produce below the set price.

We have got the studies which say very clearly that if the government intervenes at that level when prices dip too much, it’s not going to be more than Rs 1.5 lakh to 2.0 lakh crore every year. The Karnataka Agricultural Prices Commission too says the same.

Devinder Sharma has been fighting for farmers' rights for several years
Fire in the fields: Farmers across the world have been getting a raw deal, no wonder they are angry now!

However,  a CRISIL study examining 16 of the 23 crops for which MSP is announced says the real cost to the government will be Rs 21,000-crore for the marketing year 2023.

Q - But still, is that the right use of taxpayer money?

A - When you announce an economic stimulus to corporates, do you ask these questions? Do you ask where the money has come from? The Rs 15 lakh crore that has been written off by banks as bad loans, is that not a kind of an economic stimulus? But when it’s farmers’ turn, everybody starts jumping up and down saying where will the money come from…

Everyone else has income security. Look at how you deal with government employees. For them, you have set up a system that lays out the kind of salaries that have to be fixed after a few years gap. We had the 7th Pay Commission, and it cost an additional expenditure of Rs 4.5 lakh crore when it was implemented across the country. No one asked from where the money will come from. It is all assured income and guaranteed pay. But when it comes to farmers, all kinds of questions are used. You want to leave them at the mercy of the market, demand and supply. Markets have failed to provide an assured income anywhere in the world.

How long do you want farmers to continue suffering, dying and committing suicide? Is 75 years not enough? Since the National Crime Records Bureau started compiling the data on farmer suicides, nearly 4-lakh farmers have committed suicide, and you are still singing the praise of the markets? Markets have failed everywhere in the world, why do you think such a failed model should be brought into India...Are we worried that if the farmers get higher income, corporate profits would be reduced?

Give them a guaranteed minimum price. Whatever income they generate, they are going to spend it. It will in turn generate huge demand in the economy. The wheels of the development will run faster. If you give farmers a legal MSP, the economic growth will jump to the double digits immediately.

Q - Another related argument – particularly from the side of the industry – is that the kind of money that is being spent on income assurance for the farmers can be better utilized to create storage infrastructure by the government, and this storage infrastructure can be used to store the produce during times of excess and low prices. What do you think of that idea?

A - If the corporates are so keen on this idea, pay the MSP to the farmers, purchase the produce, store it or do whatever you want. Farmers will have no problem.

Q - There is also a fear that if the farmer incomes rise and they consume more, it will lead to inflation. How do you address such concerns?

A - All this is part of attempts to create a fear psychosis. Look at the media today. One of the anchors was saying - there will be 20%, 25% inflation if MSP is legalized. I am thankful to him that he didn’t say 150% inflation. He could have said that also, because today we know what media is all about today.

The point I am trying to make is, there is no other way…Farmers have come to protest only because they are getting prices that are not even fit for a living income.

The national income of farmers, according to the latest situational assessment survey for agricultural households in 2019, tells us that the average income of a farming household – which may have people who may be running a shop, or involved in MNREGA – is only 10,218 rupees per month. That is at the bottom of the pyramid.

Today’s economy has been designed in such a way that it has really sacrificed agriculture for the sake of industry. This cannot go on: The nation must wake up and rescue the 50% of the population living in penury.

It is a difficult pathway, because we haven’t tried it earlier, but it’s completely possible. That’s the kind of reform India needs. What is wrong with 50% of India’s population also becoming economically prosperous? Why are we opposed to prosperity on the farm?

Q - A lot of people are asking why only farmers from Punjab, Haryana and Western Uttar Pradesh are protesting, when most of the current MSP procurement – almost entirely in the form of rice and wheat – is from these states…

A - Yes Punjab farmers already get MSP for their primary crops. But they are standing for the farmers from the rest of the country. They are saying, in Punjab and Haryana we get the MSP, but the rest of the country should also get the MSP. Another reason is that because they are in close proximity to New Delhi, they are the ones who can raise their voice there.

 Q - Some feel that 50%, as suggested by the Swaminathan Commission, is too high a return for the farmers, and this will wreck the economy. How do you react to that?

A - Dr Swaminathan was a very distinguished agriculturist. He was the agriculture secretary of India at one time, he was with the planning commission at one time. He has been an internationally recognized scientist. The world listened to him. When he recommended C2+50%, do you think he was not aware what C2+50% would mean to the country’s economy? Why do all these bureaucrats sitting in the ministry of agriculture think they know better than Swaminathan?

Today, we are so much under pressure from corporates that we don’t even want to acknowledge the tremendous role played by Swaminathan in providing that formula that the country needs to adopt…if you can give him Bharat Ratna, you can also take up the formula he gave for the betterment of the masses. That will be the solution for ‘sabka saath, sabka vikas’

Devinder Sharma has been fighting for farmers' rights for several years
Kavitha Kuruganti: “Don’t equate MSP with government procurement”

Q - Lastly, there are also those who ask - Why should the government procure produce at a high price from Indian farmers when the same can be purchased from international markets at a lower price…

A - It is very sad that we have forgotten the ship-to-mouth existence India was living in one time not long ago. Food was coming directly from the ship to hungry mouths. We struggled so hard. Punjab farmers put up their entire effort to see the country become self-sufficient. Today, there’s complacency in the country, because we get food every night on our table, we don’t think it matters anymore. But we don’t realize that all those countries that did not become self-sufficient are facing lots of problems today.

It would be foolish if we think we can import food from abroad and achieve food security. Even a country like the US, the world’s greatest economy, puts in all kinds of protection measures to ensure they are not flooded with cheaper food from the rest of the world. If they can protect their food security, why, as a nation, are we ashamed to do that? I think this kind of thinking over the years has come because of the free market mantra.. But if we accept that, then we can also ask why we need industry in India, we can import stuff from outside. Let’s not forget the words of Dr Swaminathan – the future belongs to nations with grains, not guns.

Devinder Sharma has been fighting for farmers' rights for several years
Think out of the box to revive farm sector

Related Stories

No stories found.

The New Indian Express