The Tribune, Chandigarh, India

Thursday, January 25, 2001,
Chandigarh, India

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CMs plead for Rs 735 as wheat price
By P. P. S. Gill
Tribune News Service

CHANDIGARH, Jan 24 — The Punjab and Haryana Chief Ministers jointly met the Prime Minister, Mr Atal Behari Vajpayee, in New Delhi this morning seeking a remunerative procurement price for wheat ignoring the Commission on Agricultural Costs and Prices (CACP) recommendation to “lower” the minimum support price (MSP) for the current year.

This is the second time that the two states, constituting the foodgrain bowl of the country, have jointly sought the intervention of the Prime Minister in fixing the MSP for wheat. Earlier, Mr Parkash Singh Badal and Mr Bansi Lal in a signed joint statement on March 28, 1997, had appealed to the then Prime Minister, Mr H. D. Deve Gowda, seeking a higher procurement price. Then the CACP had announced Rs 415 per quintal as the MSP for 1997-98, while the two states demanded a minimum price of Rs 550.

The Centre rejected their demand and consequently Punjab had announced a bonus of Rs 60 per quintal, raising the MSP to Rs 475 per quintal, a hike of Rs 95 over the 1996-97 MSP.

The two Chief Ministers, Mr Badal and Mr Chautala, who flew back to Chandigarh after meeting Mr Vajpayee, said they were given a sympathetic hearing and in return apprised of the national economic perspective and problems. The two presented their case with facts and figures and the cost of cultivation calculated by agricultural scientists and economists.

The cost of cultivation came to Rs 665 per quintal, whereas the ruling MSP for wheat was Rs 580 per quintal that the CACP wanted to lower by at least Rs 60 to Rs 65 per quintal. “We have demanded that the MSP for wheat arriving in the mandis in April should be Rs 735 per quintal”, the two said in chorus.

The Prime Minister quizzed them on the possibilities of “diversification” of agriculture and farmers opting for fruits, vegetables, floriculture, dairying and oilseeds etc. He was told that farmers did go in for these options but due to poor prices and market the farmers gave up their cultivation.

Both Mr Badal and Mr Chautala suggested that a Chief Ministers’ committee should be constituted to suggest options to the wheat-paddy rotation that had adversely affected the economy and ecology of the two states. Even an experts’ committee should be constituted on diversification. In fact the two , perhaps, forgot that a detailed report on the subject prepared by the Dr S. S. Johl committee in the mid-80s is available for updating and implementation.

The issue of fixing the MSP for wheat, barley, gram, rapeseed and mustard, which was due to come up at a Union Cabinet meeting today, has been deferred, says a New Delhi report.

In fact, the two Chief Ministers had rushed to New Delhi on the issue because the item was listed on the Cabinet agenda and they wanted to put across their point of view on the subject.

Mr Badal and Mr Chautala took the plea that the MSP should be related to the input price index, the wholesale price index, management costs, farmers marketing costs and parity price with paddy. Moreover, the farmers of the two states had toiled to feed the country’s millions who went to bed hungry and had pulled the nation from the brink of famine and scarcity to become surplus in foodgrains. The contribution of the two states to the Central pool was up to 80 per cent. Therefore, it was imperative to safeguard the economic interests of the farmers.

The Prime Minister, the two said, was given a comparative statement on the MSP since 1996-97. The MSP was Rs 380 per quintal in 1996-97 and Rs 415 per quintal the following year. It was raised to Rs 455 per quintal in 1998-99, when Punjab gave a bonus of Rs 55 per quintal, making it Rs 510 per quintal. In the following two years, 1999-2000 and 2000-2001, the MSP was Rs 550 per quintal and Rs 580 per quintal, respectively. No bonus was given in these two years.

In other words the yearly increase in the wheat price on state intervention was (per quintal) Rs 95, Rs 35, Rs 40 and Rs 30, in 1997-98, 98-99, 99-2K and 2K-2001, respectively.

Besides the half-an-hour meeting with the Prime Minister, the two Chief Ministers also met the Union Ministers of Finance and Rural Development. The arguments put forth at their meeting with the Prime Minister and shared by the two Chief Ministers with the media on their return are similar to the ones contained in a five-page joint statement of Mr Badal and Mr Bansi Lal, the then Chief Minister of Haryana.

The two had at that time appealed to the sensibilities of a “farmer” Prime Minister, Mr Deve Gowda, pleading that farmers were the ones who worked under adverse conditions and in temperatures ranging from 0°C to 44 degree Celsius thereby changing the way the world looked at India in the 1960s.

“It is a paradox that the proud farming community is presented with a series of market disincentives by a government headed by a kisan leader at the Centre”. The reference was to the then Prime Minister.

The two had described the CACP recommendations of Rs 415 per quintal as the MSP for wheat as totally “unrealistic and unjustified” since it would totally cripple the economy of the two states, especially in view of the debilitating impact of inflation that has hit agricultural inputs and other aspects of the farm economy, their statement added. The situation was no different today, said Mr Badal and Mr Chautala.

That year the Food Corporation of India had released wheat for open sale in the two states at Rs 490 per quintal, whereas, the MSP announced was Rs 415 per quintal, the two had pointed out. Both Mr Badal and Mr Bansi Lal had even suggested in their statement that if Rs 550 per quintal could not be fixed as the MSP, at least a bonus of Rs 135 per quintal should be announced by the Centre over and above the declared MSP of Rs 415.

How is the cost of cultivation calculated? Tribune News Service spoke to farm economists in the region. In fact, in September-October last year, the Special Secretary, Agriculture, Mr J. N. L. Srivastava, had written to the Punjab Chief Secretary on the subject of MSP seeking reasons why it should be enhanced from the existing level for the crops in 2001-2002.

It is learnt that the government, based on reports from Punjab Agricultural University Ludhiana, and the state Department of Agriculture, recommended an upward revision of the wheat MSP. Working out the price in the backdrop of parity with the wholesale price index, parity with the aggregate input price index and parity price with paddy, the cost of cultivation worked out to be Rs 665 per quintal.

In case the parity approach for fixing the MSP is followed, the average price of wheat with 1970-71 as the base year works out to be Rs 805 per quintal. The average under these two approaches comes to Rs 735 per quintal — the price Mr Badal and Mr Chautala have demanded.

This works out to be 26.7 per cent over that of last year’s MSP (Rs 580 per quintal) and 5.8 per cent more than the price demanded by the state, Rs 695 per quintal, during the previous year.

In the same way, the states have demanded the following MSP for other crops: gram Rs 1,460 per quintal and rapeseed and mustard Rs 1,765 per quintal. The MSP in 1999-2000 was Rs 1,380 per quintal and Rs 1,670 per quintal, respectively.

Will Mr Vajpayee oblige the two Chief Ministers or follow Mr Deve Gowda?