Reasons varied, states agreed MSP fixed by Centre not enough

The reasons states cited were many — from the impact of Covid-19 pandemic to extreme heat and drought to water and soil depletion.

States had also questioned the methodology of the Commission for Agricultural Cost and Prices (CACP), a body under the Agriculture Ministry which recommends MSP every year, to calculate the cost of production, and sought implementation of Swaminathan Commission’s recommendations.

In response to a letter by Manoj Ahuja, Secretary in the Agriculture Ministry, seeking comments from states on the the CACP’s recommendations, the Rajasthan government demanded that the MSP of bajra, maize, sesamum, cotton, urad and moong be higher than the MSP fixed by the Centre.

“Due to the desert area in most parts of the state and odd conditions of rainfall, the cost of production remains high as compared to other states. Rajasthan has an important place in the sowing and production of the above-mentioned crops in the country. Therefore, in determining the MSP for these crops, it would be beneficial to get it fixed keeping in mind the proposals sent by the state,” Dinesh Kumar, then Principal Secretary in the state government’s Agriculture & Horticulture Department, wrote in his letter dated April 24.

The Jharkhand government said that due to Covid-19 and drought, farmers have been badly affected. “Agriculture is the backbone of the economy of Jharkhand. Around 70 percent of the population depends on it for employment. In the context of Covid, many farmers have returned to the state and are looking for employment in the sector. The state is also developing a roadmap for providing gainful opportunities… and any reduction in MSP will increase the stress in the sector,” reads the April 28 letter by Aboobacker Siddique P, Secretary in the state government’s Department of Agriculture, Animal Husbandry and Cooperative.

“In 2018-19, due to late onset and early withdrawal of monsoon, the state faced a drought situation and it was not favourable in the year 2019-20 either. In 2022-23, there was an acute drought situation in the state and the rainfall deficit was 32 percent. Many farmers in the state have availed crop loans and they are facing problems to repay,” the letter reads.

The state government said that the Union Agriculture Ministry should reconsider MSP recommendation for maize, soyabean, sunflower and niger seed.

The Punjab government said there is a considerable gap between prices suggested by state and MSP recommended by CACP, mainly in paddy, maize, cotton and pulses.

“Punjab has played a major role as food bowl of the country on the stake of our natural resources… water and soil have been gravely depleted and now it demands huge investments to rejuvenate these resources for the coming generations,” wrote Sumer Singh Gurjar, then Principal Secretary, Department of Agriculture, Punjab government, in his letter dated May 2.

“Paddy is being cultivated on approximately 31.68 lakh hectare during 2022-23. Prices of various agricultural inputs like seeds, irrigation, human labour, machine labour, fertiliser and pesticides/insecticide have increased 6-8% on average, but the increase in MSP of paddy is only 6.9% than that of last year. Depletion of groundwater table has forced farmers to install deep tubewells with submersible pump sets,” he wrote.

“The state government has been requesting that a margin of 50% over and above the cost of cultivation should be provided as suggested by the National Farmers Commission (also called Swaminathan Commission), and paddy stubble burning management charges on MSP…,” the official said.

The Tamil Nadu government, too, made a demand for higher MSP for paddy since the cost of inputs for paddy cultivation and the cost of labour have increased.

C Samayamoorthy, Agricultural Production Commissioner and Secretary to the Tamil Nadu Government, wrote in his letter dated May 8, 2023: “To promote crop diversification from water intensive crops and to increase the area and production of pulses crops, cultivation of alternate crops is proposed during kharif 2023. To motivate farmers to adopt crop diversification with pulses and considering the increase in the cost of cultivation, the MSP suggested by the Tamil Nadu government is reiterated for the benefit of pulses growing farmers.”

In a letter dated April 25, Special Secretary to the West Bengal government sought a higher MSP for paddy, writing: “The MSP of Rs 2,500 per quintal for kharif paddy proposed by the state government is based on the cost of cultivation data available.”

The Karnataka government said that while recommending the MSP, CACP considered the average of state figures while calculating the cost of cultivation, and this would not give an exact picture of cost of cultivation.

“For example, lease on land is not in force in Karnataka, whereas in other states, it is in force. By making this average, in estimation of cost of cultivation, it may not give justification for both the states. Some other alternative statistical tools may be used to overcome this kind of problem,” wrote Shivayogi C Kalasad, then Secretary to Government, Agriculture Department of Karnataka.

“Moong and tur are the main source of protein in our diet. MSP for moong is higher compared to tur, but the cost of cultivation of tur is higher than moong… Difference between MSP of green gram and tur is Rs 1,500 quintal. To give justice to tur growers, it is recommended to enhance its MSP to the level of green gram,” Kalasad wrote.

The Odisha government questioned the CACP’s methodology of calculation of cost of production. Sasmita Sahoo, Joint Secretary, Department of Agriculture and Farmers Empowerment, Government of Odisha, wrote in a letter dated May 1: “The commission’s recommendation of MSP of paddy is much below the state’s suggestion, which is based on practical assessment of cost of cultivation and unanimous resolution passed by the Odisha Legislative Assembly. Odisha being a major paddy growing state and having a robust procurement mechanism, it is felt that its farmers would be hardly benefited out of such marginal increase in MSP for paddy.”