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Amid stir, subsidy to Punjab farmers, MSP bill in focus

Punjab gets about Rs 35,000 crore as MSP on paddy and about Rs 25000 crore as MSP on wheat.

Written by Kanchan Vasdev | Chandigarh | Updated: December 30, 2020 11:19:09 am
Amid stir, subsidy to Punjab farmers, MSP bill in focusWomen family members of farmers protesting in Delhi, work in fields in their absence, at Daun Kalan village, in Patiala. (PTI file photo)

Amid the ongoing farmers’ protests, the subsidy given to Punjab farmers and the Minimum Support Price (MSP) is once again into focus. Punjab gets MSP of about Rs 60,000 crore annually and the farmers are extended a subsidy of over Rs 12,000 crore, including Rs 6,500 crore on account of free electricity and more than Rs 5,000 crore on fertilisers. State officials, however, defend this, say that withdrawing them would further push the cost of food grains north.

The state gets about Rs 35,000 crore as MSP on paddy and about Rs 25000 crore as MSP on wheat. As per the data, every household, related to agriculture, having a tubewell gets at least Rs 45,000 annually from the state government on account of free power.

Rest of the subsidies include seed subsidy by National Food Security Mission and other subsidies given by the Centre under Rashtriya Krishi Vikas Yojna. Since, the state has to match its share with these subsidies, the fund crunched government is unable to pay a few subsidies on time.

Though the power subsidy has been frowned upon by the successive governments as it becomes a major drain on the finances, besides being responsible for wastage of underground water, no one is willing to speak openly against this subsidy in Punjab, especially during the ongoing farmers’ protests. With 1.09 million families related to agriculture in the state, the farmers are a major vote bank in Punjab.

“The power subsidy bill has crossed Rs 6,500 crore annually. This time it is about Rs 8,500 crore as the government was not able to clear the arrears of last financial years,” said a functionary of the government.

State’s record accessed by The Indian Express on farm power subsidy has revealed that against 10,92,713 farmers having operational land holdings, as per agriculture census 2015, there are 13,51,692 tubewells (as on March, 2017). The subsidy to each tubewell costs the state Rs 44,835 roughly.

The government functionaries, however, defend the MSP and subsidy. “The argument that Punjab’s farmers is among the 6 per cent in the country who get the MSP is wrong. About 15 to 20 per cent farmers get MSP in the country as some other states are also producing wheat and paddy. Also, why should our farmers be painted as villains for being in the 6 per cent?” asked a functionary of agriculture department, on anonymity.

“Every year, Centre tells us how much paddy and wheat they want us to grow. It is the Centre that does not want us to diversify. Centre should not run away from MSP now,” he added.

The state government’s argument is that if the farmers are not given these subsidies, then the cost of food will increase as the input cost is already very high. The benefit is hence transferred to the end consumer and not the farmer alone, it argues.

Punjab State Farmers Commission chairperson Ajayvir Jakhar tweeted:  “Understand myth of #farmer #subsidies & #food #inflation. Example from the farm— for transport of every 1 acre of Kinnow fruit from Punjab to Banglore Govt collects: ₹30,000 tax on Diesel ₹15,000 road/toll tax Govt revenue ₹45,000/acre Who gets subsidies? Who pays taxes?”

A functionary of the government said that the border state’s economy was dependent on agriculture. It had missed the IT and industry bus due to terrorism and also due to Centre’s policies of giving tax holiday to hilly states. “While terrorism forced the Hindus to leave Punjab and set up shops in Haryana, the industry fled when the tax holiday was extended to the hilly states including Himachal Pradesh. Where is Punjab to be blamed? The complex economies are surviving during the current scenario and we have only agriculture. Also, our state neither has natural resources like coal nor has it got the access to sea,” the government official said.

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