Punjab farmers should talk to govt with logic, not muscle power.. they need income support subsidy, not MSP, says economist SS Johl

How do you see the demand of farmers for legalised MSP on all crops?

It is both impractical and illogical. The MSP is beneficial for farmers only if it is higher than the market clearance and if the government actually procures the produce. If MSP is legalised on 23 crops, then of course everyone would like to sell it to the government only. The government simply cannot procure the entire produce of all crops. And presumably, even if it does, where will it further sell, use or dispose it of? The government is not a trader.

So how do you think the MSP mechanism should work?

The government should announce MSP only for those crops which it intends to and can buy, and which it can further sell or distribute as in the case of wheat and paddy. The government procures it as foodgrains are further distributed for public welfare under several schemes. Where is the government going to dispose of other crops if it buys? Will it distribute for free? Who will bear that expense?

I am not even touching the financial burden aspect yet because in the first place, it is simply impossible to implement legalised MSP on every crop and procure it. The work of the government is to govern, not to trade.

The government announces lesser MSP for most of the crops as compared to open market rate. Ideally, the situation should not even arise for the government to buy it. But in recent times, when such situation has arisen for crops such as maize and cotton, the government failed to buy it. I would say that even announcing MSP on 23 crops is a complete eyewash. Why to even announce the MSP on crops the government cannot procure.

Then how farmers can be rescued from the current income crisis?

There is no agrarian economy in the entire world which can survive without subsidies. There are at least 60 countries which are giving direct subsidies to farmers worth billions of dollars. For instance, the US in 2021-22 has given more than 42 billion dollars to the farmers who are less than 1.5 percent of population and US population is one-fourth of our population. Japan gives four-time higher subsidy to their farmers. China gives the highest subsidy in the world. All these countries give development subsidies under the income support system. They do not have any MSP system. It works in our country as the government has to distribute foodgrains via public distribution system for welfare of underprivileged.

Some experts say farmers will adopt diversification if assured price is given on other crops. Is it so?

Till the time you are giving free water and power to farmers, there cannot be any diversification. Farmer knows where profit lies. There’s no crop as profitable as wheat and paddy if the water and power are free. But once you put a price on water and power, it won’t be that profitable. Only then someone will try to save water when it will have a price attached to it. Only then there will be judicious use of water. Give them income support subsidy, not free water and power. Give more to small farmers, and lesser to the bigger ones in a focus manner.

What are you views on implementation of MS Swaminathan report?

Late Swaminathan ji’s reports were referred to me by the government and I had studied them. The report only says that the MSP should be calculated with total cost plus 50 per cent formula but it doesn’t clarify what cost: A1, A2, B1, B2, C1 or C2. The basic objective of MSP is to ensure that a farmer doesn’t run out of business. The practicality of such reports should always be seen before making recommendations.

The Haryana Police is facing severe criticism for using extreme measures against protesting Punjab farmers. How do you see this?

Extreme police action against farmers is wrong and restraint is required from both sides. Farmers are also trying to show their muscle power. The government is behaving like they are at war with an enemy. Let farmers protest, raise their demands which is their democratic right. Whether their demands are right or wrong is another issue. But farmers also need to take the course of dialogue. I am also seeing political motive behind these protests, not farmer interest. What is the meaning of the statements such as “Modi nu thalle leyana hai (Modi needs to be brought down)”? Where is the interest of farmers in bringing (PM Narendra) Modi’s graph down? Some union leaders are playing politics under the garb of being farmers. By doing so, they are actually harming interest of farmers. The genuine farmers are very gullible and innocent. They simply follow if instigated. By blocking roads, trains and highways, the protesters have created such a negative environment in Punjab that no investment is possible here. Industry is trying to move out. They are strangling Punjab’s economy by creating such environment. There should be no confrontation between protesters and the police. Farmers should talk to the government with logic, not muscle power.