Though the Centre has claimed that the hike in Minimum Support Price (MSP) of various crops effected on June 1 will fetch returns in the range of 50 to 83% over cost of cultivation, the base calculations on cost of cultivation worked out for different crops by the Karnataka Agriculture Prices Commission (KAPC) tell a different tale. They show that Karnataka farmers actually suffer a loss of 2 to 39% with respect to eight crops and profits vary from only 7 to 15% for four other crops.
Agriculture economist and former chairman of KAPC T. N. Prakash Kammaradi, during whose tenure work on cost of cultivation for different crops had been undertaken, told The Hindu that the MSP declared by the Centre was actually lower than cost of cultivation for several crops in Karnataka.
This is because the Centre is trying to impose a common MSP on the entire nation though the actual situation in terms of availability of natural resources such as water, fertility of soil and agri infrastructure including irrigation facilities vary in different States and regions. “One nation-one MSP theory does not work in a country like India that has huge diversity in its agriculture and natural resources,” he maintains.
Drought situation
Pointing out that Karnataka has largest chunk of drought-prone land next only to Rajasthan in the country, Dr. Prakash says yield levels are bound to be lower than other States in such a situation.
Another technical reason for the MSP not being substantial is that the Centre has taken into consideration only the ‘paid out’ costs by farmers such as money paid towards fertilisers, seeds, pesticides and labour in addition to accounting for ‘family labour’ i.e. the cost towards family members themselves working as labourers in the farm while arriving at cost of production. But, if farmers have to benefit, the Cenre should have prepared a comprehensive MSP by also accounting for rental value of land, interest on fixed assets created on farm land such as borewell, and interest on own capital, he argues, while pointing out that the KAPC has considered all these aspects while arriving at cost of production.
As of now, growers of only paddy, cotton, maize and black gram in Karnataka will get profits over cost of cultivation from the new MSP. Similarly, growers of several crops including ragi, jowar, toor dal, bajra and groundnut will incur losses from the present MSP, according to him. Dr. Prakash also expresses concern over adequate funds not being released by the Centre for procurement of produce by paying MSP.
State’s role
He has urged the Karnataka government to either immediately take up the issue with the Centre, asking for declaration of a comprehensive MSP or make up for the loss by providing a ‘bonus amount’ from its own resources.
