Dr. Arvind Kumar*
Agriculture contributes 16% of the overall GDP and accounts for employment of approximately 52% of the Indian population. Rapid growth in agriculture is essential not only for self-reliance but also to earn valuable foreign exchange. Even PM Modiji in his speech at Gujarat yesterday underscored the importance of sustainable agricultural practices and livestock management for India’s economic growth and prosperity. Then why are the farmers in this country continuously protesting? Demanding legal guarantees for minimum support prices, loan waivers, and the implementation of crop pricing recommendations, farmers persist in their standoff. They contest criminal charges from past demonstrations, which prompted the recent repeal of contentious farm laws. While the government asserts concession and the formation of an MSP-focused committee, it accuses farmers of expanding demands and stalling negotiations. Amidst this deadlock, the protests paralyze daily life and commerce, predominantly in Punjab, Haryana, and Delhi. Yet, beyond the economic disruption, these demonstrations cast a shadow on India’s democratic health, spotlighting concerns over rights and media freedom.
Farmers, primarily hailing from Punjab, Haryana, and western Uttar Pradesh, have rallied against the trio of farm laws introduced by the central government in 2020. Their apprehensions center on the potential erosion of the Minimum Support Price (MSP) shield, exposing them to market volatility. Advocating for a statutory MSP across all crops, echoing the counsel of the National Commission on Farmers (NCF) spearheaded by Dr. M.S. Swaminathan, they seek assurance that MSP will be pegged at a minimum of 50% above the comprehensive cost of production (C2), inclusive of all inputs, family labour valuation, capital interest, and land rental worth. The NCF asserts that such a framework would not only ensure equitable returns for farmers but also catalyze agricultural investment, enhancing their income stability and sustenance. Furthermore, the commission recommends the prompt declaration of MSP ahead of planting seasons and the establishment of an efficient procurement mechanism to guarantee farmers receives MSP for their yields.
Does India’s enduring farmer protests stem from deep-seated grievances and a crisis of trust in governmental policies?
Political and Economic Implications of the Demand
Farmers assert their rightful claim to the MSP, calculated by the C2+50% formula, citing explicit pledges in the BJP’s 2014 electoral manifesto and reiterated assurances from Prime Minister Narendra Modi. They argue that the current A2+FL-based MSP fails to adequately cover their production costs, exacerbated by soaring inputs and labour expenses, coupled with mounting debts. Accusations are leveled at the government for incomplete procurement of MSP-designated crops, often leading to market prices plunging below the MSP, forcing farmers into distress sales. Concerns deepen with the implementation of new farm laws, allowing for off-mandi sales and contracts with private buyers, raising fears of MSP erosion and exploitation by corporate interests.
The call for a legally guaranteed Minimum Support Price (MSP) reverberates with significant political and economic ramifications. It stands at the nexus of political allegiance, with farmers constituting a pivotal voting bloc, causing rifts between the Central government and protesters, as well as between ruling and opposition factions aligning with farmers’ demands. Moreover, it sparks a crucial dialogue on the jurisdictional duties of both central and state authorities in safeguarding agricultural interests. Economically, implementing an MSP legal assurance prompts concerns over fiscal strain and inflationary pressures, alongside questioning the sustainability of the MSP framework. Procuring crops at the C2+50% MSP rate presents formidable financial hurdles, necessitating substantial capital, storage, and subsidy outlays. Estimates suggest the annual procurement cost could surpass the entire agricultural budget, escalating to around Rs 10 lakh crore for the 23 designated crops. Additionally, MSP elevation carries inflationary ripples, impacting food and feed costs and cascading into broader price escalations, curtailing consumer purchasing power, and macroeconomic stability.
The MSP system’s efficacy and sustainability face scrutiny, as its implementation risks distorting crop distribution, resource allocation, and market signals. By incentivizing farmers towards MSP-backed crops, regardless of market dynamics, it could sideline more lucrative alternatives. This skewed focus may strain vital resources like land and water, fostering environmental degradation and exacerbating climate concerns. The agricultural community must initiate constructive discourse with the government and stakeholders, seeking a solution balancing their needs with national interests and the 2047 Viksit Bharat vision. Alongside, farmers should embrace innovation to bolster income security, from crop diversification to sustainable practices, harnessing digital platforms, and seizing value-added markets. Moreover, advocating for and engaging in agricultural reforms, spanning extension services, infrastructure upgrades, financial access, and policy transparency, remains paramount for their collective advancement.
The Way Out
A viable approach to this quandary involves fostering authentic dialogue between government and farmer representatives, augmented by impartial experts, civil society, and judicial input. This dialogue must prioritize addressing farmers’ core concerns while aligning with national interests and the 2047 Viksit Bharat vision. Viksit Bharat envisions India as a developed nation by its centenary, emphasizing economic growth, social equity, environmental stewardship, and effective governance. Central to this vision are youth, women, the marginalized, and farmers as vital progress catalysts. Realizing this vision demands a resilient food system ensuring security, nutrition, and dignity for farmers while conserving natural resources. Collaboration among stakeholders is pivotal for fostering a culture of innovation and cooperation. Hence, government-farmer collaboration is imperative to forge a mutually beneficial resolution, honoring farmers’ rights while advancing the objectives of Viksit Bharat. The solution should also be based on scientific evidence, best practices, and public participation. The solution should also be implemented in a transparent, accountable, and timely manner, with regular monitoring and evaluation. The solution should also be flexible and adaptable to the changing needs and circumstances of the farmers and the food system. By resolving the farmer protests peacefully and democratically, India can set an example for the world and also pave the way for a more prosperous, inclusive, and sustainable future.
*Editor, Focus Global Reporter
