Taking 6% inflation into account, wheat MSP has dropped 4% in real terms: SKM
The Centre has increased the Minimum Support Price (MSP) for wheat for the upcoming rabi season to ₹2,015/quintal, a 2% hike from last year’s ₹1,975/quintal rate. Oilseeds and pulses such as mustard, safflower and masoor dal saw higher MSP increases of up to 8% in a bid to encourage crop diversification, according to a statement on the Cabinet Committee on Economic Affairs’s decision on Wednesday.
The MSP is the rate at which the government purchases crops from farmers. Currently, rates are fixed for 23 crops, including six crops during the upcoming rabi or winter season for which sowing will begin in October.
Farm unions under the Samyukt Kisan Morcha (SKM) pointed out that the rate of inflation is higher than the MSP hike for most crops, arguing that in real terms, the MSP for wheat has actually dropped 4%. They are now in the tenth month of protest against three farm reform laws which they claim will hurt the MSP regime, and have also demanded a legal guarantee for MSP. The Rashtriya Swayamsevak Sangh (RSS) affiliated farm union Bharatiya Kisan Sangh (BKS), which held a nationwide agitation on Wednesday, welcomed the MSP hikes, but pointed out that most farmers would not get the benefits as they were still unable to sell their crops at that rate.
However, Agriculture Minister Narendra Singh Tomar said that Wednesday’s decision was proof that the government was committed to the MSP system. “Some people who are spreading the illusion that MSP will be abolished should also learn from this decision. After the passage of the new agricultural reform laws, not only have the rates of MSP increased but there has also been a continuous increase in the procurement by the government,” he said in a statement.
According to the Centre, the cost of production of wheat for the upcoming marketing season of 2022-23 is ₹1,008 per quintal, meaning that the new MSP of ₹2,015 will result in 100% returns. Rapeseed and mustard farmers, who saw MSP rise 8.6% or ₹400/quintal to a rate of ₹5,050/quintal can also expect 100% returns. Masoor dal also saw a ₹400/quintal hike, which means MSP for the lentil will be 7.8% higher than last year, with 79% returns over the cost of production. Chana or gram saw a 2.5% hike in MSP, resulting in 74% returns.
“We welcome this attempt to diversify crops and encourage pulses and oilseeds like masoor and sarson (mustard). The water and labour costs are lower for these crops, and since the MSP has been increased, profits should be higher for farmers,” said Badrinarayan Chaudhary, general secretary of the BKS. “Our andolan remains because the government does not procure crops from all farmers. We still want a law which will guarantee remunerative prices for all,” he added.
The SKM, which is protesting the Centre’s farm reform laws, rejected the MSP hike as inadequate. “In real terms, it is not an increase at all for most crops as the inflation rate itself is at 6%. The main input costs such as pesticides, fertilisers and labour have shot up over the last year. So, in reality, the price that wheat farmers will get has effectively gone down 4%,” said Jagmohan Singh, who heads the Bharatiya Kisan Union in Dhakaunda. The SKM also notes that the government’s calculation of the cost of production is not comprehensive.
“Sarson and masoor have seen some real hikes in MSP, over and above inflation, but in Punjab at least, the government does not buy even one quintal of those crops. And private traders will never give us those rates, so that MSP remains on paper only. The situation is even worse in States where the mandi system is weak,” added Mr. Singh.
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