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LATEST NEWS UPDATES | Assuring Higher Farmer Income: Centre Passing the Buck to States Yet Again -Kavitha Kuruganti

Assuring Higher Farmer Income: Centre Passing the Buck to States Yet Again -Kavitha Kuruganti

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published Published on Jan 23, 2018   modified Modified on Jan 23, 2018
-TheWire.in

The proposed Market Assurance Scheme should not leave states to fend for themselves when it comes to price support for farmers, especially as the agrarian crisis is one that is caused mainly by central policies.

The Budget season, that too in the last full year before the 2019 general elections, brings the debate back to agriculture in the country. Apart from several farmers’ struggles across the country, including the unprecedented unified struggles witnessed in the Kisan Mukti Sansad on Parliament Street in November 2017, the recent election results bring the agrarian crisis to the forefront yet again.

Assured remunerative prices for all kinds of agricultural commodities have been a main demand by farmers’ movements across the country for many years, centred around the implementation of the recommendations of the National Commission on Farmers headed by M.S. Swaminathan, of having a price formula that provides at least 50% profit margin over the comprehensive cost of cultivation. Farmers have been reminding Narendra Modi of the pre-election promises made by him on this front.

Ironically, the government of India has been talking about doubling farmers’ incomes (consciously moving away from doubling farm incomes), where there is no talk about price-centred interventions, while there are volumes of proposals on efficient markets. However, it is clear that the government is unable to ignore the direct and proximal role that prices play in delivering incomes to farmers.

A new scheme, called the Market Assurance Scheme (MAS), is now being proposed that would subsume the existing Market Intervention Scheme, Minimum Price Support (MSP) Scheme and the Price Stabilisation Fund. In the concept note circulated to state governments on MAS, the agriculture ministry begins by stating: “An efficient agricultural marketing system is sine qua non for ensuring remunerative prices to the farmers on their produce. However, no market in general and much less in case of agriculture sector can be perfect, and hence cannot always be relied upon to find optimal value for farmers’ produce. As a consequence, government supported market intervention schemes become inevitable”. Now, that is a major admission, which vindicates the stand of farmers’ movements across the country.

A section called ‘Honouring MSP’ states that “it is more important to honour the assurance that is the obverse of MSP notification….the system as exists now leaves much to be desired’’. It points out that even in a year like 2016-17, which was “historically one of the best years of government intervention”, procurements (which make the MSP an actualised reality and not just a paper announcement for farmers) accounted for 33% of paddy and wheat, 8% of pulses and 1% of oilseeds in terms of their production. “This demonstrates the less than desired depth and spread of procurement operations of agri-commodities, for which annual MSPs are notified by government”, the note says.

What is MAS? It is a scheme where the decision to procure and its actual operation shall be decentralised and vested with the respective state/union territory governments, who shall assure the farmers that their agri-commodities (as notified by the state/UT governments) would be procured at MSP (notified by the Centre for the season) if prices dip below it. It shall be the responsibility of the state/UT to deal with and dispose of the procured commodities in an appropriate manner. Losses, if any, shall be compensated by the Centre up to a maximum value of 30% of MSP for that particular commodity procured. The concept note then goes on to explain why 30% losses are being indemnified, and how that figure has been arrived at.

Please click here to read more.

TheWire.in, 22 January, 2018, https://thewire.in/216220/higher-farmer-incomes-passing-buck-states/


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