Opinion Express View on farmers’ protests: Income support, not MSP

In November 2021, the Narendra Modi government repealed its three agricultural reform laws following protests by farm unions agitating at Delhi’s borders. At that time, it tried hard to reach out to the unions and convince them about how the laws — which allowed trade in produce to take place outside state government-controlled markets and agri-businesses to source directly from growers — were in farmer interest, but in vain. Today, the shoe’s on the other foot. Since February last year, farmers from Punjab and Haryana have been unsuccessfully attempting to enter the national capital, while demanding enactment of a law guaranteeing payment of the government-declared minimum support price (MSP) for all crops. One farm union leader has been on a hunger strike since November 26 — he has accepted medical aid on Day 55 of his fast. This time round, however, the Modi government’s approach has been one bordering on indifference. It has finally offered to hold talks, but only on February 14.

But sides are at fault here. The farm reform laws were, no doubt, well-intentioned. The failure, then, lay not in the bills’ provisions, but in the way they were steamrolled through Parliament sans any real debate. The dialogue with the farm unions happened much after the laws got passed. The Modi government shouldn’t make the same mistake of not engaging at the right time. The ruling party’s recent electoral victories in Haryana and Maharashtra leave it with sufficient bargaining position to convince the unions about the unreasonableness of the demand for a “legal MSP”. Prices of crops, like all commodities, are or should be determined by the forces of supply and demand. Farmers must ultimately produce what the market wants. The government would do better to ensure well-functioning markets rather than fixing, leave alone guaranteeing, MSPs.

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The debate should move from guaranteeing minimum “prices” for crops to assuring some kind of a minimum “income” for farmers. There is already a Pradhan Mantri Kisan Samman Nidhi scheme that provides Rs 6,000 annually to all landholding farmers. The quantum of income support under this scheme can, perhaps, be enhanced and even modified from a per-farmer to per-hectare or per-animal basis. All the taxpayer money now being spent on farm input subsidies — whether on fertiliser, electricity, water or credit — can be redirected and converted into direct income support. With pricing of crops and inputs left to the market, it will enable the government to focus on what farmers actually deserve — a minimum income so long as they continue to farm. MIS, not MSP, is the way forward.