MSP exists only on paper

Since a better administered MSP is the central demand of farmers, I am reading up more about it. 

Farming today means farming with losses. This needs to turn into farming where hard work can produce savings instead of losses.

Before Elections BJP promised MSP 50 % above cost of production

In his election promises, Modi had on multiple occasions promised to implement the recommendations of the Swaminathan Commission on farmers and raise the minimum support price (MSP) offered to farmers to 50% above the cost of production.

The finance minister's budget speech of 2018 said that they were going to implement their electoral promise. Farmers movements had already exposed this to be a fraudulent claim. Finance Minister had admitted that the cost he was speaking about was not comprehensive cost but partial cost.

Why MSP is critical for India's farmers

Minimum support price is at the heart of the existing system to ensure fair and remunerative returns to farmers. MSP is a solemn guarantee to the farmers to the effect that the central government shall ensure the floor price should the farmers fail to get even that level.

The election promise was that the farmer will get an MSP which is 50% higher than his entire cost of production. But the BJP Govt. made it a partial cost: this differs from whole cost in the sense of whether the imputed rent of the farmer’s land is included in it or not. Every shopkeeper or landowner includes this in his cost – just because my father has land does not mean he bears no cost for holding that land. 

The MSP is meant to ensure that the sale price of agriculture produce will not fall below this minimum amount. But the reality is that ordinarily, the MSP becomes the maximum price for the farmer that only some farmers get. 

MSP exists only on paper

MSP is announced for 14 crops. Yet only two are actually bought by the government - only wheat and rice. For the rest, if you can sell them somehow, then that’s it.

Of all the rice produced in the country, the government buys one-third. Of all the wheat produced in the country, the government buys one-fourth. It buys 0.2% of all the bajra produced in the country. 

The MSP exists only on paper. The farmer comes ready with his crop and asks the government to buy it. The government says the arrangement does not exist in your district, the centre will open 15 days later here. Or it closed ten days ago and you’re late. Or you do not have the required paperwork.

India's agriculture goals have to put the farmer first

There is also a frequently made argument that productivity should be increased. In reality, today, we see surplus being the problem. The agricultural policy of India has always been production-oriented instead of being producer-oriented. That is the entire problem. The farmer is not affected by where your production levels have reached. The dilemma is that when production increases to such an extent, the farmer is killed.

We need an independent commission for agricultural costs

The farmer should get a legal guarantee for the MSP. The Commission for Agricultural Costs and Prices, which determines the price, is under the thumb of the government and is run by the yes-men of the ruling party. This should be made an independent, accountable commission, whose recommendations should be binding. Farmers should have the legal right to get at least the MSP for their produce. They should have the right to go to court, file a case and get compensation if they do not get the MSP.

For 13 years, the farmer has been denied 50 % MSP over his costs

Since 2014, Indian banks have written off nearly 7 lakh crore in unpaid loans. Just 2 % of these belong to farmers. 

Today the farmer is badly caught in debt. The farmer will have to be exempted from this debt one time. This is not pity or begging. For 13 years, the farmer has been denied the Swaminathan Commission recommendations. The arrears of 11 years turn out to be Rs 22,00,000 crore, the farmers’ loan is Rs 14,00,000 crore. Exempt them of this debt, so that the farmer can stand up.

Yogendraji asks, are farmers today the priority of the country, or are they not? This will determine whether the government has money in its pocket for them or not.

Nearly half of what we pay for Diesel, goes to the central government as excise

One of the comebacks to my farmer posts yesterday was from a neighbour who called to say that diesel was expensive as 'all the money paid by consumers went to Kejriwal.' I asked if he meant state governments in general, including BJP ruled UP, Haryana and Madhya Pradesh, which kept back most of the money from diesel sales in state taxes. 

He was forced to agree that all state governments did so. He added that center had no role in increasing prices, only the state governments did. Centre kept back very little of the taxes he said, the lion's share went to state governments.

I wrote back to him : Sir, kal aap ne kaha ki the high price that the farmer is paying for diesel is because of taxes by state governments. Not as per this detailed analysis in May this year : 

Fuel prices in India are currently one of the highest in the world. Every time the farmer (or the rest of us) buys diesel : 

# Nearly half of what he pays goes to the center.

# Nearly a third goes towards the actual price of diesel with small amount of freight and dealer commission.

# Nearly a quarter of the price goes to the state govt. as taxes. 

# Central govt. taxes are double that of State.

This gentleman who called with the diesel story is a leading light of the ruling party at the center. He is helpful in colony affairs and is affectionate. But I supposed he had to project his party's defence. 

That defence follows a familiar pattern - jumble lies with half truths and discredit whoever has a different opinion.. hope most people wont look up the facts and repeated over and over, your lie will become the truth in people's minds. 

That is how the lies about muslims, nehru family, even gandhi are being propagated day in and day out.. thanks to being on several groups i can see what the paid trolls churn out on a daily basis.. all lies.. 

All the forwards you hear and posted on these groups - taken from facebook pages which stock hundreds of lying stories.. are LIES paid for by the ruling party, via trolls. Award winning books have documented this phenomenon in detail. 

Take any of these stories and check it for veracity. i have done it dozens of times... all lies which you happily swallow.

So what is the lie being put out in the case of diesel and farmers ? That centre has no role in increasing prices - lie. 

Central Govt. is the only beneficiary of increasing prices along with state governments (in a smaller proportion). Neither the consumer nor even the oil companies are benefitting from decontolling the price of fuel in india. 

When price of oil goes down in the international market (like it did in most of 2020), central govt. does not lower prices in india - it slaps more excise duty and takes all the savings from oil purchase into its own coffers. this has been done atleast twice this year already. 

No benefit of lower international prices is passed on to indian consumers, including farmers.

Another lie is that only State Governments benefit from slapping taxes on fuel. 

Central Govt. takes twice as much of the fuel amount as tax as state government. 

Nearly half of what you pay at the petrol pump goes to the central government.

BJP's claims on protecting MSP will only be believed when it is part of the new law

 In this interview on the farm bills 2.5 MONTHS AGO, Yogendraji again clarifies:

# No Kisan sanghathan has ever asked for the provisions in these bills in the past many decades. # Even the RSS backed Kisan sanghathans are in opposition to the farm bills. # The Government did not consult a single kisan organization in the run up to the bills - it is in a tearing hurry, first passing ordinance and then these bills.. it is clear that the intent is not to benefit farmers, but some other objective. At about 4.15 counter, Yogendraji explains that the ability to stock as much as desired WILL NOT benefit farmers, but very large stockists who will find it easy to manipulate the market for farm commodities. Both farmers and consumers will lose out by such manipulation. At about 7.15 counter, Yogendraji talks about the bill impacting APMC mandis: # For a long time, farmers have been asking for improvements to the APMC Mandi system. # They have also been asking for APMC Mandis to be set up in large parts of the country where APMC Mandis dont exist at all. # But the Government has no response to what the Farmer organizations have been asking for. Instead, it says it will allow private players to set up mandis outside the existing APMC mandis. # The carrot to lure farmers to private mandis is that the 6-8 % tax currently charged at APMC Mandis will not be charged at private mandis. # This will lead to the APMC Mandis becoming dysfunctional in a few years. Once the APMC Mandis are dysfunctional, MSP will not be available to farmers. At about 8.30 counter, Yogendraji explains that if the govt. has farmers' interest at heart, it would create a level playing field between private mandis and APMC mandis : # Same MSP applicable at private mandis as in APMC Mandis. # Same taxes levied at the private mandis as in APMC Mandis. # Same registration of traders in Private mandi as in APMC Mandi. But the Government is not interested in these amendments as it has no interest in farmer welfare in these laws. They are meant for some other objective. At about 9.20 counter, Yogendraji explains that the loose talk about 'freedom for farmers' is a complete LIE. There is no restriction on farmers since 1975. Any farmer can sell his produce anywhere today also, before these bills were ever passed. The restrictions are not on farmers but on traders. And this game is being played to benefit traders and big business, not farmers. The restriction on traders is this : that trade in agricultural commodities is permitted only inside APMC Mandis (where they exist), as per the rules of the mandis. At 10.55 counter, Yogendraji explains that wherever in the country, APMC Mandis have been removed, farmers' situation has deteriorated remarkably. For example, in Bihar, a law was passed in 2006 (by the same NDA Government) to abolish APMC Mandis. Today all over the country, rice is sold by farmers at 1600-1700 while in Bihar it is sold at 1000-1100 Rs., he says. A study on Bihar last year said that “Farmers are left to the mercy of traders who unscrupulously fix a lower price for agricultural produce that they buy from [them].' The report concluded that 'Bihar’s repeal of the APMC system and consequent increase in price volatility could be one of the reasons for low growth of agriculture in the state.' At 11.40 counter, yogendraji explains that farmers dont want to opt out of the AMC mandi system. They want it strengthened. BJP's claims on protecting MSP will only be believed when it is part of the new law. Already there is not a single law in the country that ensures farmers get minimum support price for their produce. For example, the MSP for corn is 1760 but it is selling at 850-900 rs. a quintal in W Bengal and Bihar (when the interview was being recorded in Sep 2020). Once Minimum Support Price is enshrined in law, the farmers dont mind private mandis or laws for company contract farming etc. At about 14.10 counter Yogendraji explains that a model APMC act was created by the Vajpayee Govt. in 2003 at the center. States were requested to reform their acts in line with the central act to remove anomalies in the functioning of APMC mandis. But even State BJP governments since then did not adopt this model law. Today, crocodile tears are being shed at the centre that state governments have not adopted a model law - when it was the same party in power in most of them in the years past ! At 16.45 counter Yogendraji explains that most of the farmer organizations in Punjab protesting against these bills are not allied to either Congress or the Akalis - they have criticized both parties. At 19.45 counter, Yogendraji says that the talk of private investment in agriculture is laughable as all farmers anyway invest their own resources in farming. Agriculture in India is already in private hands - the farmers' hands. But the Government uses the term 'private investment' only in the context of big companies. The idea is to withdraw from government role in building warehousing, in providing minimum support price, and leave agriculture only to market forces. At 23.15 counter, the interviewer refers to the PM saying that the farmer can now sell his produce everywhere, even export it. Yogendraji responds with a sense of shame, that the 'the PM lies'. He asks to be shown the law in any Indian state that prevents a farmer from selling his produce anywhere - there is no such law anywhere. There is a restriction on exports, which is not dealt with by these three farm bills.

+++++++++++++++++ So what is it that the farmers are asking for ? That MSP be maintained and improved upon. That APMC Mandis be maintained and improved upon. How hard is that for a callous, uncaring Govt. to understand ? And how hard is that for us - the rich of this country, but still dependent on food grown by farmers to understand ? Subsidies to Farmers is a complex subject. Suffice to say that many countries around the world spend similar amounts as India in subsidizing farmers or even more, including Indonesia, China, Japan, US and the EU. Only New Zealand has done away with subsidies and continues to prosper in agriculture.

The Reality of BJP's Three Farm Bills, 2020

I still havent had time to delve into the intricacies of the 3 farm bills. But a friend sent me a video of Yogendraji explaining the essence of the 3 bills. 

In the decades I have heard him speak, he is the one of the most measured, well researched, calm, and circumspect speaker on any subject i have heard. 

He has no axe to grind with any party and we would do well to pay attention to what he is saying. He says in the video :

# Unlike what BJP acolytes are propagating, none of the bills has been asked for by any farmer's organization across the country, EVER in their history. And now 450 farmer organizations are in protest of the bills for months. 

# The government has assumed a deaf year to what the farmers have actually been asking for during lock down.. 1. They asked for compensation as they were not permitted to sell their produce in the mandis for months. 2. Farmers asked for lowering of diesel prices (diesel is used in agriculture). Diesel prices are headed downward throughout the world and are rising only in india. 3. Farmers also asked for compensation for destroyed crops. But the government did none of these things.

Instead, the government SHOVED THREE UNASKED FOR GIFTS DOWN FARMERS' THROATS :

FIRST, THE JAMAKHORI KHOLO KANOON, Yadavji says : There were limits uptill now on the  quantities of farm commodities that could be stocked by private entities. Now those limits stand removed. 

For whose benefit ? Adani is making silos in Punjab. The stocking capacity of these silos is 100 times bigger than the biggest godowns now available to farmers. So any amounts of rice, wheat, dals can now be stored by private entities. 

What will be the likely impact ? Stocks may be released to market just before harvesting of crops, to depress rates available to farmers. Later, when farmers have sold all at low rates, prices will be manipulated by large stockists to make them expensive for consumers.

SECOND, BANDHUA KISAN KANOON, Yadavji says : This does not refer to the contracts farmers do with each other for farming on each other's lands for selected time periods. This law is to facilitate companies contracting farmers for their produce. There is a precedent for this law in the contracts Pepsi company did with farmers in Punjab. Let us say the contract was for potatoes to be sold to Pepsi at Rs. 6 a kg.

The first year the market rate for potatoes when the crop was ready to be sold, was 10 rs. a kg. But the company forced farmers to sell their produce at 6 Rs. still, referring to the contract. 

The next year the market rate for potatoes was 4 Rs. a Kg. The farmers asked for the contracted 6 Rs. from Pepsi. But the company said the size and taste of the potato was not proper ! It forced farmers to sell at Rs. 4. a Kg only. 

The contract farming law says any complaints should be made to the SDM but farmers dont have access to SDM. Thus farmers will be forced to farm on unacceptable terms, making them Bandhua.

THIRD, MANDI TORO, MSP CHORO KANOON, Yogendraji says : This law says private mandis will be built near APMC mandis. Farmers will not be able to make such mandis themselves as investments in the hundreds of crores will be needed for a mandi. 

Initially, the private Mandi owners will offer farmers marginally greater amounts than that being offered by the APMC mandi. So farmers, always trying to survive, will gravitate towards these better paying mandis. but by say the 4th sale season or so, the APMC mandi system will be disfunctional as so many of the farmers will have been persuaded to trade in private mandis.

Once APMC Mandis are no longer an alternative, the private mandis are likely to bring down their rates. Farmers will have no option to sell anywhere else then. 

In fact before the whole nation, Jio company of Reliance, employed the same strategy : it promised free net and calls and lured in large nos. of indian mobile customers. Once it reached a critical mass, it suddenly raised prices.

The Mandi system has not been perfect and farmers have many complaints. But for the last many decades, it has given some protection to farmers. Now, Modiji, acknowledging the problems in Mandis, says let us remove this protection altogether - let the farmer enjoy freedom !

Farmers dont want to damage the APMC mandi system. They want it improved.