Friday, May 7, 2021

Why states ignored the MSP bill drafted by farmers?

Punjab, Haryana, Kerala, and some other states are opposing the Union’s anti-farmer laws with valid reasons. But why did they not consider the bill on MSP drafted by farmers themselves?

The All India Kisan Sangharsh Coordination Committee (AIKSCC), a coalition of over 190 farmer organizations, had come up with comprehensive legislation for farmers in 2018. The farmers for the first time drafted a law for themselves, but political parties supported but did not bring any law. Telangana CM who brought several schemes like ‘Rythu Bandhu’ for agriculturists should consider this draft.

Swaraj Abhiyan president Yogendra Yadav was instrumental in knitting together this farmers coalition, the AIKSCC. He said that this bill aimed to make MSP announcements a legal entitlement with a new methodology for calculating costs of production.  Another Bill was also drafted to ensure a one-time unconditional waiver of all farm loans and setting up a commission with quasi-judicial powers to deal with disaster and distress-related issues.

Right to sell at MSP

The Bill should also include a provision ensuring the right to sell at MSP be made an irrevocable right along with prescription of punishment to anyone who purchases at lower rates. AIKSCC finalized the draft bills after nationwide consultations. The bills are titled “The Farmers’ Freedom from Indebtedness Bill, 2018″ and “The Farmers’ Right to Guaranteed Remunerative Minimum Support Prices for Agricultural Commodities Bill, 2018″. 

The Farmers’ Right to Guaranteed Remunerative Minimum Support Prices for Agricultural Commodities Bill, 2018, says that every farmer has the legal right to a guaranteed remunerative minimum support price (MSP) for the sale of his/her agricultural commodity. The bill also proposes a redressal and compensation mechanism for farmers and traders, the regulation of prices offered by traders, and rules for public authorities for accountable functioning.

The Bill defines who the farmer is. Section 2(g) says that a farmer as a person who grows crops or other primary agricultural commodities; he or she may or may not own land. This definition also includes all agricultural ‘operational holders’, cultivators, agricultural labourers, sharecroppers, tenants, poultry and livestock rearers, fish workers, beekeepers, pastoralists, non-corporate planters and planting labourers, forest-produce gatherers, women farmers, and farmers’ groups, producer cooperatives or self-help groups cultivating collectively-owned or leased land.

Also read:Farmers fighting NDA and their Non-Democratic Alliances

Agricultural commodities

Section 2(a) of the bill, specifies that an agricultural commodity refers to all cereals, millets, pulses, oilseeds, all fibre crops, horticulture crops (fruits and vegetables), spice crops, tuber crops, medicinal plants, all varieties of milk, all minor forest produce, floriculture, grass, fodder grass and tree produce, nursery produce, all plantation produce, all animal products (meat, mutton, eggs and poultry), all fishery produce (fish, mussels, marine fish and freshwater aquatic produce), honey, silkworm cocoons, and all such primary produce/agricultural commodities and their ‘cognate expressions’.

The legal guarantee for remunerative MSP

The bill made it clear that the guaranteed MSP should include at least a 50 per cent profit margin over the comprehensive cost of production. National Commission on Farmers, in its reports to the central government between 2004 and 2006 has strongly recommended this.

Comprehensive cost of production

The bill says the MSS should cover: “Paid-out costs, which include the costs of human, animal and machine labour; annual maintenance costs of animals and machinery; expenses on inputs such as seeds, fertilisers, manure, pesticides, insecticides, weedicides and irrigation; depreciation on implements and farm buildings; land revenue and other taxes; rent of leased land; interest on credit obtained; insurance premiums; and processing, transport and marketing costs”.

Imputed costs that include the cost of family labour (at wage rates for that area); rent of owned land; interest on fixed and working capital; a risk margin of 10 per cent over the cost of cultivation per hectare; and managerial costs”.

“Projected costs, calculated using a Composite Variable Input Index that is based on the rate of inflation of different inputs. This should be applied to fixed costs and to any other costs resulting from the increase in the use of a particular input.”

Central and the State Commission

The bill suggests that the central government must set up the Central Farmers’ Agricultural Costs and Remunerative Price Guarantee Commission to recommend guaranteed remunerative MSPs that include at least a 50 per cent profit margin over the comprehensive cost of production. The Central Commission must also monitor the prices being realised by agricultural commodities and recommend that the government regulate the costs of agricultural inputs.

All the states also should set up State Farmers’ Agricultural Costs and Remunerative Price Guarantee Commission. It should recommend the MSPs of agricultural commodities of the state to the Central Commission. It should also suggest higher MSPs to the state government and a bonus over and above the MSPs. It must also maintain a fund for paying compensation to farmers who are denied the guaranteed remunerative MSP or who are forced to wait for payments from buyers (including government procurement agencies) for the sale of their agricultural commodities.

Also read:Bharath Bandh: From 11 am to 3 pm Tuesday

Redress for grievances and compensation

The State Commission should constitute a three-member committee at the taluka level to address any complaints by farmers. A farmer who is not paid the guaranteed remunerative MSP by a trader is entitled to compensation equal to the difference between the MSP and the price obtained for his agricultural commodity from the trader. For delayed payments from buyers (including government procurement agencies), a farmer can get a compensation of 15 per cent of the total value of his/her agricultural commodity for every month of the delay.

Offences and penalties

The state government must ensure that the offer price or auction of every agricultural commodity begins at the guaranteed remunerative MSP in all agricultural markets.

According to this bill, any trader (including one in a contract farming agreement) who purchases a commodity below the guaranteed MSP or refuses to buy it at the MSP, commits a cognisable offence. The trader must pay a penalty for this offence and can be imprisoned for a period of three months to a year.

Any agreements (oral or otherwise) between purchasers/traders or commission agents that limit, control or suppress the sale prices of agricultural commodities (which, in turn, adversely affect the MSP) are also illegal and can led to penalties or imprisonment.

Finally, the State Commission can find any public servant or authority guilty of not initiating action against traders for purchasing agricultural commodities below the MSP, intervening in the market, or not providing compensation to farmers. In such cases, the person can be fined one month’s salary and imprisoned for six months.

Prof. M. Sridhar Acharyulu
Prof. M. Sridhar Acharyulu
Author is former Central Information Commissioner and Professor of Law at Bennett University

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