Looking beyond MSP

Looking beyond MSP: Broadening the debate over the farmers’ protests

A farmer ploughs his field in Kadmati village, West Bengal | ILRI/Stevie Mann (Wikimedia)

India’s agitating farmers are demanding an assurance that their farm produce will be procured, in regulated markets or otherwise, at a minimum support price (MSP); and that there should be a better mechanism to resolve disputes in contract farming and to prevent companies reneging on the promised price in the event of oversupply. Further, they want assurances that the various charges involved in selling their products will be minimized.

The negotiations between farmers and the government being held now could have preceded the framing of laws, which do have some very useful provisions just as they have fewer safeguards against misuse of authority and exploitation of smaller farmers. The government seems to be willing to make those amendments.

The divergence between what farmers need and what they are demanding needs to be bridged with more evidence-based arguments and more patient listening. There has to be a greater willingness on all sides to give and take in the larger interest of sustainable farming, sustainable soil and water use and healthy production for consumers and safe and profitable working conditions for farmers. How should we reframe the debate?

The hidden costs of farming

Whether we like it or not, the fact remains that the paddy/wheat rotation has not only sapped the fertility of the soil, but also lowered the groundwater table, increased the real cost of pumping groundwater (despite excessive subsidy in water and electricity), led to excessive use of water and leaching of nutrients, and caused an increase in the cost of other farm operations. Excessive water also leads to excessive weed growth, for which farmers spray herbicides including those that are banned abroad. Farmworkers and small and marginal farmers do not use any safety gear to protect themselves from these chemicals. The cancer train from Punjab to hospitals elsewhere is a well-known consequence.

The organic carbon in the soil hardly is 0.5%, while ideally, it should be 2% for sustainable farming. Micronutrient deficiencies in the soil affect the quality of micronutrients in the grain and accordingly in our body. None of these issues is being raised in the current debate. How do we bring order and a semblance of fairness not just to the current generation of farmers but also to the future generation of farmers who deserve good groundwater, healthy soil, diverse land use, and augmented agrobiodiversity? 

Better prices for farmers

The new farm laws may not correct the structural problems of profitability, productivity, and decline of agriculture. It is also true that public procurement systems reinforced the paddy/wheat rotation to meet national requirements while neglecting the long-term consequences. So, it is not fair to blame only farmers for it.

With more cultivation choices for the farmers, the competition among buyers could improve prices. (Though Bihar’s experience in the case of maize and other crops suggests otherwise.) If atta manufacturers buy direct from farmers, they could get better quality wheat, and consumers would get better quality flour. Some of the large Indian companies have established atta brands by doing this and there is no reason why others cannot do the same. Assurances on a fair price and market interventions in the years of high productivity will hopefully assuage the feeling of farmers. This is even more relevant for pulses and oilseed farmers, who suffer because of very limited market interventions.

It is well known that cartelization takes place in the mandis. There is nothing that can prevent that amongst large-scale buyers, comprising Indian and multinational companies. The new laws give no assurance to farmers that such cartelization will be monitored and prevented. This should be rectified.

Farmers’ producer organizations or associations or companies could engage in contract farming and overcome the vulnerability of individual small farmers and negotiate with the strength of their membership with large buyers. There is a need for an empathetic hearing of farmers’ anxieties in this context. In India, Amul is an example worth looking at. Amul transfers to producers more than 80% of the final price charged to the consumer, higher than the 30–40% that European cooperatives or corporations do. Amul is an exception since in India most cooperatives have failed. This has been achieved through transparency, accountability, and responsibility. Regardless of their political affiliations, the directors of the Amul board broadly trust the cooperative’s professionals in safeguarding the interests of the farmers. Despite having a political board, political interference is generally minimal in Gujarat’s district cooperatives.

It is also ironical that despite the agitation we are witnessing, farm leaders are not asking for support in setting up processing units. During our biannual shodhyatras (learning walks) across the country, we did not notice any farm level processing units in the villages we passed through in Punjab’s Jalandhar and Haryana’s Mahendragarh districts. It is worth remembering that the story of Rajasthan’s success in oilseed production cannot be delinked from the establishment of several oilseed processing plants following the national mission on oilseeds. The increase in the MSP of oilseeds and pulses is far higher than in the grains. It is a clear signal that farmers should diversify. By growing more oilseeds and pulses, we can increase the profitability of farmers, reduce water and power consumption significantly, reduce chemical inputs, and help India overcome malnutrition and improve the health of the people. If we produce more than what we need, the export markets are far more buoyant for oilseeds and pulses than for grains.

Conclusions

To summarize, farmers need higher incomes and better infrastructure for storage and transportation. They need much larger, decentralized, and distributed facilities, to store not just grains but also fruits and vegetables. Growers of perishable goods like fruits and vegetables are far more vulnerable than grain producers. Around half of India’s agricultural production is of fruits, vegetable, milk, fish, and pulses. Yet the voices of these producers are not heard. There is a need to broaden the debate urgently so that diverse voices are heard, informed arguments are made, and with greater policy flexibility more efficient outcomes follow.

Anil Gupta retired as a professor from Indian Institute of Management, Ahmedabad. He is the founder of the Honey Bee Network and the National Innovation Foundation – India.

Anil Gupta
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