India

MSP guaranteed, not even impossible

The elephant is out, the tail is stuck! Prime Minister Narendra Modi withdrew all three controversial agriculture laws, risking his personal reputation and the image he had built over the years, but has been reluctant to give a legal guarantee of Minimum Support Price (MSP). Although he has proposed to form a committee for this and its process has also started, but some alleged economic experts of the government and government agriculture experts are saying that the legal guarantee of MSP is harmful for the economic health of the country. They are telling with the help of false and true figures that if a legal guarantee of MSP is given, then how much burden will be on the government and how much inflation will increase. Remember how the last time Union Home Minister Amit Shah met farmer leaders, after that news came that if the legal guarantee of MSP was given, then farmers would have to pay Rs 17 lakh crore for the crop.

Where did this figure of Rs 17 lakh crore came from, no one can tell, but the reality is that the government will not have an additional burden of more than Rs 5 lakh crore and that too when all the crops coming for sale in the market are being sold by the government. Buy it. As far as inflation is concerned, it is also a kind of propaganda because the difference between the MSP fixed by the government and the market price of the crops coming under its purview is only Rs 36,000 crore. Is. There are two things to understand here. The 23 crops that the government has kept under the MSP, if it does its entire purchase, which is not possible, even then it will have to spend five lakh crore rupees more than now. But if it just makes a law of buying and selling at the minimum support price and everything is allowed to run as it is going on now, then the traders will have to pay only Rs 36,000 crore more.

Anyway, if the government is serious about the interests of the farmers, then it should go ahead and give a legal guarantee for the sale of crops at the minimum support price so that the exploitation of farmers in the market is stopped. Keep in mind that most of the farmers in the country sell the crop immediately after harvesting because they are in urgent need of money due to many reasons. Whether it is to repay the loan taken for agriculture or for domestic needs, they have to sell their crops immediately, which is taken advantage of by the businessmen. They buy their crops at throwaway prices. Right now the government has fixed the MSP, but there is no legal obligation to buy and sell at this price, so farmers cannot press for that price. If buying and selling at MSP itself becomes mandatory, then such farmers, who are unable to take their crops to the market or where there is no system of mandis, will also be able to sell their crops on MSP.

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This myth also needs to be understood that if MSP is guaranteed, then the government will have to buy every grain of food grains, on which lakhs of crores of rupees will be spent. The second myth is that if the entire grain is sold in the market at MSP, the inflation will increase tremendously. The enemies of farmers are spreading both these myths. Keep in mind that never the entire produce of the farmer is sold in the market. Only 70-75 per cent of the total produce goes for sale. The rest of the farmer keeps the grain he needs with himself and along with it collects grain for livestock and also for seeds. After this, the remaining grain comes in the market, but the government buys a very small part of it.

Significantly, the government fixes the MSP of a total of 23 crops. There are seven cereals, five are pulses, seven are oilseeds and four are commercial crops. Among these, sugarcane is the only crop, which has a legal guarantee of purchase and sale at MSP. Sugar mills are obliged to buy sugarcane at the price fixed by the government. Despite this, 70 to 75 per cent of sugarcane is procured at MSP, which is the highest. On an average, the government procures around 45 per cent paddy, 36 to 38 per cent wheat and around 25 per cent cotton at MSP. Of all the other crops, there is no crop, whose government procures more than five-six per cent of the total yield or is sold at MSP. Yes, last year the purchase of gram was definitely up to 20 percent, but that is because due to Corona, the government had to distribute one kg of gram for free. This year again the purchase of gram has come down to 5.25 percent. There are about 14 crops whose not even one per cent of the total produce is sold above the MSP. Keep in mind that there are products like fruits, potatoes, onions, milk, eggs etc., for which no MSP has been fixed.

However, the total yield of 23 crops whose MSP is fixed by the government was estimated to be close to Rs 12 lakh crore in the last financial year. But this entire produce is not available in the market for sale. A large part of this is kept by the farmer for his needs, seeds and livestock. The quantity of different crops coming in the market is different. According to an estimate, the value of crops that came in the market in the last financial year, above their MSP, is 9 lakh crore rupees. If we talk about government procurement, then last year it has bought paddy and wheat worth more than 2.5 lakh crore rupees. The purchases made by NAFED, CCI etc. of oilseeds, cotton etc. were worth around 32 thousand crores. Apart from this, sugarcane worth Rs 1 lakh crore was sold. That is, a total of about Rs 4 lakh crore was purchased over the MSP. The rest of the food grains worth Rs 5 lakh crore were sold in the open market and at a price less than the MSP. If this grain is also sold at MSP, then according to an estimate, 36 thousand crore rupees more will be spent.

Keep in mind that the government does not need to buy every grain of the crop coming in the market. So he will not need to withdraw money from his treasury. It should continue to buy as much as it does and make it mandatory that even in the open market there will be no buying and selling at a price less than the MSP. Even if such a law is enacted, the businessmen will have to pay only Rs 36,000 crore more. Obviously, there will be no calamity due to this and neither inflation will start touching the sky. That’s why it is not understandable why the government does not want to give legal guarantee of MSP!

Shivam Bangwal

Shivam Bangwal is an India-based Entrepreneur. He is the Founder of Successful Startups like Youthistaan, People News Chronicle & Branding Panther. Shivam has done his Master's in Computer Applications.

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