The Centre has hiked the minimum support price (MSP) for paddy by less than 4% to ₹1,815 per quintal for the 2019-20 season. The ₹65 per quintal increase is much lower than last year’s hike of ₹200 per quintal, but will ensure that the MSP remains exactly 50% above the cost of production, not including land costs.
The decision was taken by the Cabinet Committee on Economic Affairs on Tuesday. MSPs were hiked for 14 major crops of the kharif or summer season, to ensure they remain at a level that is 1.5 times the cost of production.
The only commodities with MSP that will ensure a higher than 50% return over input costs are bajra (85%), urad (64%) and tur dal (60%). However, even for these crops, returns are lower than last year.
The MSP is the rate at which the Centre procures these crops from farmers. However, there is no guaranteed procurement mechanism for most crops. Just over a third of the paddy harvest is bought by the Food Corporation of India for use in the public distribution system.
Farmers groups pointed out that MSPs do not actually help the farmer unless procurement can be increased.
Badri Narayan Chaudhary, general secretary of the Bharatiya Kisan Sangh, a farmers’ group affiliated to the ruling BJP, welcomed the increase in MSPs, but said it was now up to the government to ensure that farmers get the full benefit on the ground.
“What is the rationale of symbolically increasing prices when paddy is being sold at 40% lower rates in the mandi?” asked V.M. Singh, convenor of the All India Kisan Sangharsh Coordination Committee, a platform of more than 200 farmers groups. He noted that paddy was sold at ₹1,100-1,200 per quintal in Uttar Pradesh and Bihar last year when the official MSP was ₹1,750 per quintal.
“The government must guarantee buyback at that rate so that the benefits reach 100% of farmers, or it is useless,” Mr Singh said, adding that production costs should have been calculated including land costs, as recommended by the M.S. Swaminathan Commission.
“Whatever the government has announced may cover costs, but is available to so few farmers that it is almost a ritual,” said Avik Saha, convenor of the Jai Kisan Andolan. He urged the Centre to ensure the implementation of the PM-AASHA scheme announced last year to increase procurement. “It has the ingredients of a good scheme, and now that the electoral rush is over, it must be implemented,” he said.