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HomeOpinionWhy MSP is a fraud: Yogendra Yadav

Why MSP is a fraud: Yogendra Yadav

For the last five decades, MSP has always been a piece of paper for most farmers. But now we have a prime minister who says, “MSP tha, hai, or rahega!”

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Ballari is famous, or infamous, for many things – Ballari brothers, mining scams, the Sonia Gandhi vs Sushma Swaraj election – but its agricultural produce market is not one of them. Located on prime land in the district headquarter, this mandi is no different from mandis all over Karnataka. Its size, infrastructure, system of auction, and record-keeping is better than most other states of India, except Punjab, Haryana, and some parts of Maharashtra. Like most states in the South, Karnataka enjoys better governance than most states in the north or the east. Besides, Karnataka was the first state to have its own Agricultural Price Commission.

So, this is not a bad place to test Prime Minister Narendra Modi’s grand promise: “MSP tha, hai aur rahega”. [Past, present or future – minimum support price is for real]. I visited this Mandi on 6 March to kick off the Samyukt Kisan Morcha’s ‘MSP Dilao’ (Get me MSP) campaign. There was a good reason to begin with Karnataka. Harvesting and crop arrivals start 2-3 weeks earlier in the state than the rest of the country. Besides, there is little room for a centre-state blame game, since the same party rules at both the levels.


A look at ground reality

Mandi officials were prompt to hand us a printout of the price at which various agricultural commodities were sold (“tendered” in the mandi parlance) by the farmers that day. Eight of the 11 commodities traded on 6 March were from the list of 23 crops that enjoy MSP. Of those eight, only one – urad or black gram – was sold at or above the MSP. Make it two out of nine, since we were told sunflower seed was also sold above the MSP but was somehow missing from the official list. The remaining seven crops were sold below what the government of India officially assures the farmers to be the minimum price that the farmers must get and the government will support the farmers to secure. This included all the five major crops of that area: tur, makka, jowar, chana and bajra. This is what the price table looked like in Ballari on 6 March:

If you think Ballari might be an exception, it is not. More or less the same prices were found all over Karnataka markets for most crops. The average February price for bajra and maize was actually lower in the rest of the state than in Ballari. Only tur fetched a better price elsewhere. If you think this year is an exception, it is not. An average of the last three years (2017-18 to 2019-20) by the Karnataka Agricultural Price Commission shows that as much as 72 per cent of the agricultural produce in the state sells below the MSP. T N Prakash Kammardi, former chairperson of Karnataka Agricultural Price Commission, estimates that farmers of Karnataka lost Rs 3,119 crores last year due to distress sale below MSP.


Also read: Modi govt plans to procure more pulses this year to guard against inflation & help farmers


Dream price, not support price

What about the rest of the country? For an answer, I turned to my friend Sunil Tambe who has tracked agri markets for well over a decade. He mined Agmarknet, the official website that reports prices for each mandi on a daily basis and reached conclusions even more depressing than the picture gathered from Karnataka.

None of the major kharif (summer) crops, except paddy, fetched anything close to the assured minimum. If paddy did better, it was solely due to the government procurement in many states. Fine varieties of long-grain paddy, which are not covered by MSP, suffered badly and were sold at less than the MSP for ordinary PR variety. No state other than Haryana, not even Gujarat, procured bajra at the MSP. As a result, Bajra sold around Rs 1,300 against the official MSP of Rs 2,150. During the peak arrivals in the month of November, moong was sold for an average price of Rs 5,556, about Rs 1,600 below the official MSP.

We noted that in Ballari, urad was the only exception that fetched a price above MSP. But that was not so in the rest of the country at the time of peak arrivals in November. In that month, it sold for an average price of Rs 4,789 against the MSP of Rs 6,000. Similarly, tur or arhar sold at around Rs 4,500 to 5,000 against the MSP of Rs 6,000. The average price for maize was 1,354 against the MSP of Rs 1,850.

The marketing season for rabi has just begun, but the signs don’t look good. Wheat, the biggest crop of the season, is yet to be harvested. As in the case of paddy, it may get a decent price wherever the state procurement takes place. In other mandis, farmers could suffer a loss of Rs 300 to 500 below the official MSP of Rs 1,975. Mustard could be another exception, for the initial trends suggest that its market rate is hovering between Rs 200-300 above the MSP of Rs 4,625.

For all other crops, the MSP is the ‘maximum aspirational price’. Ragi season is nearly over and it has sold around a thousand rupees lower than the MSP of 3,295. Maize grown in winter is already in and is again selling between Rs 1,300 to Rs 1400, much below the MSP of Rs 1850. Barley is trickling in and the initial trend from Rajasthan shows it is selling around Rs 1,300 against the MSP of Rs 1,600. Jowar has also started coming to the market and the hybrid variety is getting about Rs 1,000 lower than the MSP of Rs 2,620. Chana or Bengal gram, the other big crop of the current season, is currently selling between Rs 4,400 and 4,800. That translates into a loss of Rs 300 to 700 per quintal, since the MSP is Rs 5,100.

My apologies for making you go through these painful details. But there is no other way of demonstrating that MSP is a fraud imposed on farmers, what is called “minimum” price is for all practical purposes a dream price, and that the “support” promised in the support price never arrives. There is no other way to explain why farmers do not believe paper assurances, and why they want nothing short of a legal guarantee of MSP.

To be sure, the situation was no better under previous governments. For the last five decades, MSP has always been a piece of paper for most farmers. The only difference is that we now have a Prime Minister who has the gumption to say: “MSP tha, hai, or rahega!”

You must be joking, Mr Prime Minister.

The author is a member of Jai Kisan Andolan and coordination committee of Samyukta Kisan Morcha. He is also the National President of Swaraj India. Views are personal.

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63 COMMENTS

  1. Did the government procure these products at price below MSP? No? Then MSP is not a ‘fraud’.

    If the government procures produce, it is bound to give MSP. The government is however not bound to procure produce. Price realization is simply a function of demand and supply. So if the product is selling for less than MSP on the open market it simply means that the government will be buying at a loss if they do procure it.

    Now that Maharashtra has made it illegal to buy grain at a price lower than MSP for private traders, all we are going to see is a drop in quantity demanded. If the private trader can not make a profit, they are simply not going to buy grain from farmers. Yogendra Yadav probably knows this. He must have a very low opinion of his readers’ intelligence.

  2. Mr YY seems to be a frustrated man blindly opposing Modi without reasoning He and his ilk are getting undeserved air time by platforms managed by anti Modi groups in print and digital media
    He was for MSP earlier now he says it is myth for the past 50 yrs
    He better consult his personal physician

  3. If MSP is a fraud, why did he not talk about it till now? When he spoke , he and others wanted govt assure that MSP will continue. Offering opportunity to farmers to ALSO sell outside Mandi, if better prices are available, is harmful to Mandi middlemen. Middlemen fleece farmers and are supported by local political outfits. If farmers are unhappy with farm laws, why there are no protests except those of middle men cum farmers in NCR? Those who suspected surgical strikes, air strikes have their own agenda to oppose BJP even if the move is good for the country. It is pity that these individuals put their on selfish interests above national interest.

  4. According to Niti Aayog, “The sub-agent of FCI is the Karnataka Food & Civil Supplies
    Corporation (KFCSC) which carries out the procurements in the State under the MSP
    operations. Paddy and other coarse grains are procured by KFCSC in order to prevent
    distress sale by the farmers. Before the start of harvesting season or around the time of
    harvest, the District Level Task Force Committee under the chairmanship of the Deputy
    Commissioner meets and decides to open the procurement centers for MSP in the required
    Blocks. The Agriculture Department in the district deputes trained Graders to these centres
    and publicity is done about the opening of centres for procurement under MSP. The Graders
    test the samples for FAQ standard requirements and on conformity to FAQ standards; the
    produce of the farmers is purchased at MSP fixed for particular crop and variety. The
    agency disburses the amount to the farmers by crossed cheques within a week or fortnight”

  5. the issue is not with the MSP . It is with the farmer. Possibly he does not know about the existence of the MSP. Possibly he is financially destitute. Possibly he is indebted and paying 24% interest. He has alredy dead and lost the battle. That is 50 plus percent of India

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