Reforms may ‘dilute’ MSP regime

Vibha Sharma

Tribune News Service

New Delhi, May 17

The measures announced by Finance Minister Nirmala Sitharaman for farmers and the agriculture sector have failed to cut ice with many experts from two major foodgrain-producing states Punjab and Haryana.

‘Just credit facilities’

The measures announced were just credit facilities. I don't think its net effect is going to be very positive for Punjab and Haryana. While I need medicine today you are telling me that you will make a cold storage, keep my medicine and give it to me later. — Lakhwinder Singh, Expert

The “futuristic” measures had nothing for the distressed sector, they said. Besides, they also expressed apprehension, viewing them as an indication of the apprehended possibility by wheat and rice farmers in the states — minimising procurement under the MSP.

“What we saw yesterday were just credit facilities. I don’t think the net effect of the announcements is going to be very positive for Punjab and Haryana. Infrastructure is good for the economy, but today it is the matter of life and livelihood for crores of small farmers and labourers dependant on the sector. While I need medicine today you are telling me that you will make a cold storage, keep my medicine and give it to me later,” said Lakhwinder Singh, Director of the Centre of Development Economics and Innovation Studies, Punjabi University.

Agricultural policy expert Devinder Sharma believes the reforms government is suggesting are essentially aimed to “dilute/dismantle” the existing system of APMC, MSP regimes. “The marketing system and infrastructure are both well established in Punjab and Haryana. It is here that the FM’s announcements will have impact. Punjab has already amended the marketing act, allowing setting up of private mandis and entry of private players in the existing mandis. These developments appear to be hinting towards limiting procurement and doing away with the responsibility of MSP,” he adds.

A recent recommendation by the Commission for Agricultural Costs and Price (CACP) to the Centre generated widespread debate regarding review of the open-ended procurement policy.

The CACP in its price policy for Rabi crops, the marketing season 2020-21, said: “The open-ended procurement policy for rice and wheat has led to mounting food stocks and adversely affected crop diversification. These excess stocks create storage problems and high storage and financing costs will lead to high food subsidy burden. The commission recommends that open-ended procurement policy should be reviewed.”

Meanwhile, appreciating the FM’s efforts, CACP chairman Ashok Gulati said farmers and consumers, including in Punjab and Haryana, would gain from the measures.

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