Fortify MSP regime

One of the few bright spots amid the pandemic and the prolonged lockdown has been the performance of the agricultural sector. Despite the restrictions imposed in mandis to contain the spread of Covid-19, wheat procurement has reached an all-time record of over 385 lakh tonnes in the ongoing marketing year. The Finance Ministry is hopeful that agriculture, for long the bedrock of Indian economy, would help in expediting a turnaround. With the avowed aim of reforming the farm sector, the Centre recently passed the Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance; the Farmers’ (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance; and the Essential Commodities (Amendment) Ordinance. These ordinances have received the thumbs down from the Congress and other Opposition parties, which fear that the move is a step towards doing away with the MSP (minimum support price) regime. Even the Shiromani Akali Dal, a BJP ally, has stopped short of wholeheartedly backing the proposed changes.

The farming community is a key vote bank that no political party can afford to ignore, let alone antagonise. The BJP-led NDA government, which has set itself a hard target of doubling farmers’ income by 2022, has already initiated direct benefit transfer for subsidies and crop payments so that the commission-pocketing middlemen can be kept out of the equation as far as possible. Now, the Centre needs to remove doubts and misconceptions about the ordinances. The MSP regime and the public procurement system have facilitated assured marketing for farmers for decades, even though rising input costs and unremunerative prices are eating into their profits. Strengthening the existing setup that has made the nation food-surplus, coupled with empowering the farmer to strike the best bargain for his produce, can go a long way in keeping agriculture viable.

Though agriculture is a state subject, the sector has been ailing as state governments prefer to work in silos, going all out to appease one lobby or the other. A national market for farm commodities, as and when established, could be a win-win situation for all stakeholders.