Legal binding for MSP is next on agenda, say protesting farmers

Legal binding for MSP is next on agenda, say protesting farmers

Legislation making MSP mandatory will ensure better returns for farmers; economists say it might increase food inflation

While Prime Minister Narendra Modi’s surprise announcement on Friday to repeal three controversial agriculture laws has led to palpable relief among farmers, there is still concern over the Minimum Support Price (MSP) issue.

Media reports have quoted Rakesh Tikait, national spokesperson of the Bhartiya Kisan Union and a key leader in the farmers’ protest, as saying farmers would next seek legislation to make MSP legally binding. Further, they intend to stay on at the protest site until the three laws are actually repealed, which would happen in the upcoming Winter session of Parliament, slated for November 29 to December 17.

Also read: Farm law repeal — Beyond the subduing of triumphalism

For over a year, farmers — mainly from Haryana, Punjab and Uttar Pradesh — protested on the Delhi border, demanding that the Centre repeal three pieces of legislation. These are the Farmers Produce Trade and Commerce (Promotion and Facilitation) Act, 2020; the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act, 2020; and the Essential Commodities (Amendment) Act, 2020.

While Modi has promised to repeal the Acts, there has been no indication on whether the farmers’ demand for a law to make MSPs legally binding will be acted on.

The Samyukta Kisan Morcha (SKM), a coalition of farmers’ unions formed in November 2020 to protest against the new laws, was scheduled to hold a meeting on Sunday, November 21, at Delhi’s Singhu border to arrive at an MSP ‘strategy’.

The MSP law demand

MSPs are meant to ensure farmers get at least 50% returns over cost when they sell to the government. They also help farmers address issues such as rising cost of cultivation and poor demand. However, these primarily benefit paddy and wheat cultivators as the government procures these food grains in large quantities, with a resultant impact on returns for the farmers.

At present, the Centre sets the MSP for 23 major crops at 1.5 times the estimated cost of cultivation (to account for inflation). Farmers want a blanket law that does not allow any trader to buy a farm produce below MSP.

While such a law would benefit farmers when there is good demand, it may be tough to implement, say experts. It may also increase food inflation, it is feared.

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