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Journalism of Courage
The first of the 12 demands made by protesting Punjab farmers in their email sent to the government on February 6 was for a law to guarantee the procurement of all crops for all farmers at MSP, and for the determination of crop prices as per the recommendations of the Dr Swaminathan Commission.
Three rounds of talks held in Chandigarh between three Union Ministers and the leaders of farm unions have remained inconclusive. A fourth round is scheduled for Sunday.
Agricultural scientist M S Swaminathan, who was posthumously awarded the Bharat Ratna this month, played a major role in the changes in Indian agriculture in the 1960s and 70s that helped India achieve food security.
On November 18, 2004, the Ministry of Agriculture constituted a National Commission on Farmers (NCF) under Prof Swaminathan. The commission also had two full-time members, Dr Ram Badan Singh and Y C Nanda; four part-time members, Dr R L Pitale, Jagadish Pradhan, Chanda Nimbkar, and Atul Kumar Anjan; and a member secretary, Atul Sinha.
The 10-point terms of reference of the commission, which reflected the Common Minimum Programme of the Congress-led UPA government, included suggesting a “comprehensive medium-term strategy for food and nutrition security”, and ways of “enhancing productivity, profitability, and sustainability of the major farming systems” in the country.
Between December 2004 and October 2006, the NCF submitted five reports running into a total 1,946 pages. The reports were deeply sympathetic to farmers, and made several recommendations, including at least two on minimum support prices (MSP).
However, the Swaminathan Commission did not recommend either a legal guarantee for MSP or the formula for its calculation that the farmers’ unions are now demanding.
The 245-page first report of the NCF, titled ‘Serving Farmers and Saving Farming’, opens with the sentence, “The acute agricultural distress now witnessed in the country, occasionally taking the form of suicides by farmers, is the symptom of a deep seated malady arising from inadequate public investment and insufficient public action in recent years.”
A chapter in the report, titled ‘A New Deal for Women in Agriculture’, underlined the “need…to ensure that working women have the needed support services and have access to timely credit and extension services”.
It called for the setting up of a National Board for New Deal for Women in Agriculture under the Union Food and Agriculture Minister, with the Union Ministers for Women and Child Development, Rural Development, and Panchayati Raj as co-chairs.
The report also suggested that Farm Schools should be established in the fields of innovative farmers, in order to spread their message and methods. “Promoting 50,000 Farm Schools across the country will require an investment of Rs 150 crore,” it estimated.
The report suggested establishing a grain bank and community food and fodder banks, promoting insurance, and setting up a national network of advanced soil testing labs.
The 471-page second report of the NCF was titled ‘From Crisis to Confidence’. It recommended a code of conduct for contract farming, and advocated amendments in the state APMC Acts and the Essential Commodities Act. In a sense, its recommendations were pro-market reforms-oriented. In fact, the three farm laws introduced by the Narendra Modi government in 2020, and repealed under pressure from the protesting farmers, were on the lines of these recommendations of the Swaminathan Commission.
“The State Agriculture Produce Marketing Acts need to be amended to provide for…encouraging the private sector or cooperatives to establish markets, develop marketing infrastructure and supporting services, collect charges and allowing marketing without the necessity of going though APMC/ licensed traders,” the Commission said. “…Market fee and other charges need to be rationalized…”
The report noted, “There is an urgent need to undertake a review of the Essential Commodities Act and other legal instruments covering marketing, storing and processing of agriculture produce; some of these Acts and Orders appear to have outlived their utility.”
Also, “The Government may work out a farmer centric ‘Code of Conduct’ for contract farming arrangements, which should form the basis of all contract farming agreements and also encourage development of farmer’s groups/ organisations to negotiate with the purchasers and take care of the interests of the small farmers,” it said.
The Commission recommended futures and options trading in agricultural commodities, with supervision and regulation by a “SEBI like autonomous body”.
The Swaminathan Commission did not recommend the fixing of MSP based on C2 (actual cost of production) plus 50 per cent, as demanded by the protesting farmers. In its second report, the NCF made just two recommendations relating to MSP.
First, “Delay in issue of the Minimum Support Price (MSP) particularly in respect of Kharif crops needs to be avoided.”
Second, “Implementation of MSP across regions needs improvement.” The Commission noted that “except Punjab, Haryana, UP, and Andhra Pradesh to some extent, the prices of agri commodities covered under MSP…often rule below the MSP in absence of any government intervention”.
Despite weaknesses, MSP “may have to be continued in the foreseeable future and its implementation improved”, the report said.
While the report did not mention calculation of MSP based on C2, it did discuss the cost of production, and made a suggestion for the Commission for Agricultural Costs and Prices (CACP), which recommends MSPs:
“The cost of production is one of the main considerations in deciding the level of the MSP. However, it is not easy to decide the cost of production. The cost of production of the same crop varies between regions and between farmers of the same region. The CACP recommends the MSP on the basis of the weighted average cost of production in states giving consideration to the variability of the cost of production…, taking into account also the factors of production, paid as well as the imputed values of unpaid factors in fixed and variable cost of production. The risk factor and the marketing and post harvest expenses are however, not taken into account. The CACP could look into these aspects.”
The second report highlighted the recommendations of the High Level Committee on Long Term Grain Policy, 2002 headed by the economist Abhijit Sen in a box. The Abhijit Sen Committee had examined various aspects connected with MSP and price support operations.
The Abhijit Sen Committee had said: “In recommending MSPs, which should apply on Fair Average Quality [FAQ] grain, the CACP should go strictly on the basis of C2 cost of production (i.e., all costs including imputed costs of family labour, owned capital and rental on land) in more efficient regions… The CACP should also indicate its estimates of A2 + FL costs (i.e., costs actually paid plus imputed value of family value labour) for relatively high cost regions.”
But this recommendation did not find mention in the recommendations of the Swaminathan Commission.
In the first volume of its fifth report, the NCF summed up its recommendation for MSP: “MSP should be regarded as the bottom line for procurement both by Government and private traders. Purchase by Government should be MSP plus cost escalation since the announcement of MSP. This will be reflected in the prevailing market price. Government should procure the staple grains needed for PDS at the same price private traders are willing to pay to farmers.”
The CACP, the Commission said, “should be an autonomous statutory organization with its primary mandate being the recommendation of remunerative prices for the principal agricultural commodities of both dry farming and irrigated areas. The Minimum Support Price (MSP) should be at least 50% more than the weighted average cost of production.”
As such, “The ‘net take home income’ of farmers should be comparable to those of civil servants,” the report said.
