MSP, loan waiver and crop insurance, crucial issues for farmers

Farmers expect that this government make a radical break from all its earlier Budgets

Updated - July 13, 2024 11:51 am IST

Published - July 10, 2024 07:00 am IST

Farmers expect this government to take a radical break from all its earlier Budgets. File

Farmers expect this government to take a radical break from all its earlier Budgets. File | Photo Credit: K.K. Mustafah

The Bharatiya Janata Party-led National Democratic Alliance faced huge setbacks in the Lok Sabha elections in the agrarian belts of the country. The BJP lost in at least 38 seats in five States where the farmers’ movement against the policies of the Narendra Modi government was strong. This government is a continuation of the first two Narendra Modi regimes that favoured the corporate houses and tweaked policies in the agriculture sector in their favour.

Farmers expect that this government make a radical break from all its earlier Budgets. Of course, this is asking for a tall order. But unless that is done, the farmers’ unrest and agrarian crisis are not going to subside. The National Crime Records Bureau’s data tells us that 1,00,474 farmers and agricultural workers committed suicide between 2015 and 2022. This figure is growing and is a tragic indication of India’s agrarian crisis.

The most important issue for farmers in the country today is statutory minimum support price at the rate of C2+50%, that is one and a half times of the comprehensive cost of production, as recommended by the M.S. Swaminathan Commission. This was a promise made by Narendra Modi and the BJP manifesto in 2014. Now, they are silent on this. Unless that’s done, it’s going to be impossible even to begin to resolve the agrarian crisis. They will have to make Budgetary provisions to implement this. This is our first demand. But to do this, they will have to hold discussions with farmers’ movements. There have been no such discussions.

The second point is about the rising cost of production. Our expectation from this year’s Budget is that the government bring down production costs by reducing prices of fertilizers, seeds, insecticides, diesel, water and electricity. Rates of all these inputs are going up. Even if farmers are to be given MSP at C2+50%, the cost of production must be brought down. A statutory MSP at a rate of C2+50% may have no meaning if the costs of production are not brought down.

The government can bring down these prices by having a strict control through the Budget on the corporates who are now part of the production process of these inputs. Earlier, most of these inputs were produced by the public sector. The Budget must support public sector companies to continue to be engaged in the production of fertilizers, insecticides and seeds. This government talks of self-reliance, but does nothing to improve self-reliance. This is apparent in the case of fertilizers.

The third expectation from this Budget is a complete one-time loan waiver for farmers and agricultural workers nationwide. Unless this is done, farm suicides cannot be prevented. This government has written off loans worth ₹16 lakh crore of corporates. And, they say they don’t have money to waive loans of farmers. Loan waiver, bringing down the cost of production and ensuring MSP at a rate of C2+50 must be done together. If this is done, 70% of the crisis in the farm sector can be dealt with.

The fourth point is relevant in the context of climate change. In light of regular droughts, floods, unseasonal rains and hailstorms, there must be a comprehensive crop insurance scheme, which is totally different from the Pradhan Mantri Fasal Bima Yojana. Several States have opted out of it. Some States have begun their own scheme. This is because PMFBY is working in the interest of insurance companies, and not farmers. Budgetary provision must be made for a comprehensive scheme that helps farmers.

The Budget should help public sector companies engaged in the production of fertilizers, insecticides and seeds. File

The Budget should help public sector companies engaged in the production of fertilizers, insecticides and seeds. File | Photo Credit: Sandeep Saxena

The fifth point is on the question of irrigation and power. Public sector investment in irrigation and power has been cut in the last decade. These sectors are being handed over to private companies and hence, the cost of water and power is rising. The private sector cannot invest the monies a government can, for example, in building dams. The question of irrigation must be addressed by the Union government. A number of irrigation projects are incomplete nationwide. If they are completed, a large section of land will come under irrigation. So, the Budget must make provisions to complete these irrigation projects.

In the power sector too, unless there is public investment, it will be difficult to ensure steady supply of electricity. Power production is also now under the control of corporate houses. Smart meters are going to create havoc for all consumers, both rural and urban. The government had agreed to hold a discussion on Electricity Act amendments. But no discussions have been held so far.

The sixth point is about the expansion of MGNREGA. Ever since the Modi Government came to power, they have been trying to starve MGNREGA of funds. The number of work days has come down to just 42. The government must increase wages to ₹600 and the number of work days to at least 200. It is a lifeline for rural workers and it will be a step to increase their purchasing power.

The seventh point, which is very important, is the question of land. The government has changed the slogan of ‘Land to the Tiller’ to ‘Land to the Corporates’. In total violation of the Land Acquisition Act, there is massive acquisition of farm lands by corporate houses. Tribal lands are being taken by the government without any compensation for mining and other purposes. Land acquisition must be done only when strictly necessary for public purposes. Radical land reforms must be initiated and completed.

To raise resources for all this, the Union government must impose wealth tax and inheritance tax. They have tremendously reduced corporate tax. They must restore it. India is a country with one of the least rates of corporate taxes. Income tax slabs also must be changed to ensure the rich pay more. They are reducing income tax across the board, instead of providing relief to the middle class. Direct taxes must be increased and indirect taxes must be reduced and tax evasion must be stopped using stringent methods.

(Dr. Ashok Dhawale is a senior leader of the Samyukt Kisan Morcha and President of the All India Kisan Sabha.)

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