Corporate tax holidays are 'sops', farmer subsidies are 'welfare': Scientist

Thousands of farmers from Haryana and Punjab have been protesting on the roads leading to New Delhi for the past two weeks, demanding a legal guarantee on minimum support price (MSP) for their farm produce.

It is mainly the farmers from northern India, particularly Haryana, Punjab, and some parts of Uttar Pradesh, who have taken part in this protest. But why have farmers from other parts of India not joined them in their agitation?

The Federal interviewed principal scientist R Gopinath of the MS Swaminathan Research Foundation to gather facts behind the protest, the demand, and its implications.

What is MSP? Why do farmers want legal guarantee for it? 

MSP means minimum support price. It is an assured price fixed by the Union government to procure 23 items, including paddy and wheat, from farmers. The MSP covers the comprehensive cost of production of the crop spent by farmers and 50 per cent of the expected profit. It was recommended by the MS Swaminathan Commission in 2006. It may not give farmers a huge profit but provides the “minimum support price” to cover the investment.

A legal guarantee (the government ensuring that farmers never have to sell below MSP) makes farming viable for farmers. They will continue to engage in farming, ensuring food security of India. So, MSP is beneficial for farmers as well as consumers. 

The farmers’ protest in Delhi has become a major issue, but why are we seeing only farmers from Punjab and Haryana in this protest? Why have their counterparts from other parts of India not joined it?

Farmers in these two states depend completely on the market to make a living. Whatever paddy they produce is only for the market. They do not use it for consumption. Their staple food pattern is wheat-based but they produce paddy, which has to be procured by the government.

Till the early 1960s, the areas where paddy is now cultivated in Punjab, Haryana, and some parts of Uttar Pradesh were used to grow coarse grains and oilseeds. To ensure food security of the country, paddy cultivation was promoted in those areas. Though rice is not in their food system, they cultivated it only to supply to the Food Corporation of India (FCI).

If you take the recent Food Grain Bulletin (January 2024), the total paddy procurement was 399 lakh million tonnes. Of that, 200 lakh million tonnes came from Punjab, Haryana, and Uttar Pradesh. It shows how they sell nearly all of what they produce.

Farmers from other areas are also supporting this protest. But their agitation is muted because they also depend on non-farming activities for their livelihood. For example, in Tamil Nadu, even among the farming households, the income from farming activity is just around 25 per cent of the total income. But in states like Punjab and Haryana, they completely depend on farming for a livelihood.

Is it a far-fetched dream for the government to implement what was recommended by the Swaminathan Commission?

In 1990-91, agriculture contributed close to 35 per cent of GDP in India, whereas it has now declined to 15 per cent. As a nation, when we hesitate to invest in a scientific approach to our farming, the returns will obviously come down. We have huge manpower, and we need food supply, but we are not investing in modernisation and improvement of farming practices to strengthen our agriculture sector. 

Compared to service industry-based development, agriculture is a major sector that will help attain inclusive growth. If the sector is improved, it will ensure employment for scores of people on their land and also ensure the nation’s food security. The Swaminathan Commission’s recommendations were all about that.

If MSP is provided as a legal guarantee, there will be some financial implications. But it will churn out thousands of jobs and create sustainability in food production. India will avoid droughts like in the 1960s, when we depended on countries like the US for food.

It is sad that when corporates are given tax holidays, we call it an “incentive”. It is not seen as a burden. But farmers’ subsidies are considered as “freebies”. We have to change the nomenclatures.