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MSP should be triple the cost of production of major crops: Chandigarh High Court

The court also recommended that MSP be granted legal status by bringing in suitable legislation.

Written by Sofi Ahsan | Chandigarh |
July 30, 2019 11:43:43 am
MSP, farmer suicides, Punjab The bench observed that farmers are forced to sell their crops under distress due to the loans they take on exorbitant rates. (File)

The Punjab and Haryana High Court Monday said the minimum support price (MSP) in the agriculture sector should be three times the cost of production of major crops to save farmers from distress. The court also recommended to the Union government and the Punjab government that MSP should be provided legal status, by bringing in suitable legislation.

The Court directed the Punjab government to consider implementing the broader recommendations of the Swaminathan Committee and consider providing MSP at least three times above the average cost “by taking into consideration the comprehensive cost including imputed rent and interest on owned land and capital as well as hired labour, cost of seeds and fertilizers, machinery, expenses incurred on irrigation, rent of leased land, and labour put by farmers and their families, in consultation with the Commission for Agricultural Costs and Prices”.

“Though the MSP is being announced since 1965, but the stark reality is that it has not boosted the income of farmers to bring them out of abject poverty. Time has come when the MSP should be given legal force by granting legal rights to the farmers to get fair value for their crops,” read the judgment passed by a division bench of Justices Rajiv Sharma and Harinder Singh Sindhu.

The bench further added that “the farmers must be empowered to get the MSP as a legal right and its enforcement should not be left only with the bureaucratic set up”.

Stating that “middlemen thrive at the cost of poor farmers”, the bench observed that the farmers are forced to sell their crops under distress due to the loans taken on exorbitant rates and because there is no regular chain of warehouses to store the produce. “In case the state government builds a sufficient number of warehouses, the farmers can store their crops and can sell it subsequently at a remunerative price. The Parliament has enacted the Warehousing (Development and Regulation) Act, 2007 but the same has not been implemented in letter and spirit,” read the order.

Directing the Punjab State Cooperative Agricultural Development Bank to ensure that the crops of their members are insured to safeguard them from the vagaries of weather and unforeseen circumstances, the bench also passed a direction to the bank that “as far as possible, no marginal or small farmer, whose land holding is less than five acres is rendered landless”.

The bench suggested the state government to formulate a scheme for providing insurance cover, including weather insurance, for crops in consultation with the national insurance companies. It also advised the Reserve Bank of India to evolve a scheme in consultation with the stakeholders, including banks and state government, about the manner in which the agricultural loans are to be advanced and their recovery is effected, and also regarding the waiver of loans in the eventuality of suicide by the farmers.

“The appellant bank/ primary agricultural development banks are directed that in case the land of the farmers possessing more than five acres of land is purchased in sale, same may not be further disposed of without giving an opportunity to the members of the bank to re-claim it by paying reasonable installments, in order to avoid intervention of third party rights,” the order further reads.

The bench also directed the state government to devise methods to reduce the role of middlemen in procuring the food-grains and asked it to implement the provisions of the Punjab Prohibition of Private Money Lending Act, 2007 in letter and spirit to safeguard the interest of small and marginal farmers.

The bench observed that the state government should take assistance from the latest state-of-the-art technology and prepare apps for each and every field to determine the crop growth and destruction in case of any natural calamity. It directed the Punjab government to prepare the app in consultation with the department of technology and private players. “These apps can be prepared Khasra-wise by taking the help of satellite imagery. To avoid time, the state officers and bank officers need not go to the field to verify the status of field,” reads the order.

The state government has also been suggested to consider framing a scheme for payment of reasonable compensation or pension to the families of farmers who have committed suicide, as per their financial capacity.

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