Updated: February 16, 2021 8:50:14 am
The Congress may have, of late, posited itself as a champion of the concept of Minimum Support Price (MSP), but sifting through the track record of the party-led governments in the country, one finds that they not only worked to undermine and undercut the MSP regime but also sought to lay down the framework for dismantling it. It was a bit rich to see former Union Minister Kapil Sibal argue in the Rajya Sabha that the current regime is not willing to give even MSP to farmers.
Beyond an annual increase in the MSP, there are two fundamental levers which make this paradigm relevant for farmers. First is the lever of procurement of crops at MSP by the government. It is pointless to announce higher MSP if government agencies aren’t procuring enough foodgrain. Second is to enable a cooperative international framework such that developed countries don’t challenge the increase in MSP and public procurement of foodgrain, invoking the regulations of the World Trade Organisation (WTO).
On both counts, the UPA government has left a questionable legacy. Congress leaders often use statistics to claim that during their tenure, the increase in MSP was much higher. But a granular look at data reveals a completely different picture. Between 2004 and 2014, the average increase in MSP of all foodgrains was nine per cent but this was in the backdrop of an average food inflation of eight per cent. Between 2014 and 2020, the NDA government led by PM Narendra Modi offered an average 8 per cent increase in MSP for all food crops against an average food inflation rate of 4 per cent.
In tune with the recommendations of the Swaminathan Commission, the NDA government is working hard to double farmers’ income by ensuring remunerative prices, better market facilities, crop insurance, quality seeds, fertilisers and freedom from middlemen. The three farm laws are nothing but a wholesome boost to the dream of farmers’ self-sufficiency.
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Between 2014 and 2019, the Modi government paid farmers Rs 8 lakh crore to procure 469.6 million tonnes of wheat and paddy at MSP, while the UPA government spent only Rs 3.76 lakh crore in purchasing a total of 316.3 million tonnes of paddy and wheat between 2009 and 2014. In short, the UPA government was merely increasing MSP one per cent above inflation and was purchasing far less from farmers.
However, the biggest assault on the MSP was laid down by the Congress government in December 2013 at the WTO’s Bali summit. Had PM Modi not won the 2014 elections, the Congress’s surrender in Bali would have ensured that the MSP becomes redundant by 2018.
In 2013, the UPA government led by then Prime Minister Manmohan Singh was under immense pressure by developed countries in the WTO to accept the Trade Facilitation Agreement (TFA) –an instrument to ease customs procedures amongst members. India had so far resisted the TFA as it wanted assurances that richer nations will not challenge the national Food Security Act and MSP increases under the WTO dispute settlement mechanism. This trade-off was essential as procurement of foodgrain under MSP is considered by the WTO as an amber subsidy and is capped at 10 per cent of total foodgrain production of the country. Under the UPA-enacted Food Security Act, public procurement of foodgrain was way beyond 10 per cent and, therefore, it was essential that India gets a waiver on this 10 per cent cap if developed countries wanted it to sign the TFA.
Instead, then Union commerce and industry minister, Anand Sharma, agreed to sign the TFA in exchange for an assurance that India will adhere to the 10 per cent limit or negotiate a permanent solution within four years. If India had not negotiated a solution by 2017, the developed countries could challenge the entire public procurement of food and MSP programme at the WTO, thereby risking sanctions. The Congress and media friendly to it tried to project this abject sale of farmer’s interest in Bali as a major victory. In order to please the West, Singh’s government threw our farmers under the bus.
It was India’s good fortune that as soon as PM Modi came to power six months later, his government discovered this abject surrender by the Congress. The Modi government realised this would be disastrous for Indian farming and took the rare step in diplomacy — of not honouring an international agreement made by a previous government by refusing to sign the TFA unless the 10 per cent cap on subsidies for farmers were indefinitely removed.
Several countries criticised the Modi government for this step but Atmanirbhar Bharat put farmers’ interest first. Finally, when PM Modi visited the US in November 2014, he got President Barack Obama to agree to an indefinite clause which allows India and other developing countries the right to offer as much subsidy or support to farmers for an indefinite period rather than just four years, as negotiated by the Congress government.
A debate is welcome but I find it extremely shocking when my friends in the Congress claim that the Modi government is launching a conspiracy to eliminate MSP. Fake allegations do not enrich debate. The principal reason the Opposition is losing credibility is that its track record doesn’t demonstrate its present intent. Even with regard to the GST, the Congress took a different stand when in power and when in Opposition. It is my humble submission to the Opposition benches that they will do great service to the nation if they were to sincerely compare their own past actions to their present position.
This article first appeared in the print edition on February 16, 2021 under the title ‘How Congress damaged MSP’. The writer is a BJP leader and minister in the Assam government
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