Farmers should get their fair share
Farmers dumping tomatoes, potatoes and onions on the roads is a recurring phenomenon. In recent years, news reports have highlighted that farmers are being denied the appropriate price in the mandis, the drop in prices often ranging from 25 to 40 per cent.
Against the production cost of Rs 32,644 per hectare for wheat, the income realised by the farmer is Rs 7,639, leaving a shortfall of Rs 25,005 per hectare.
In the case of paddy, the gap is Rs 36,410 per hectare; for maize, the loss a farmer incurs per hectare is Rs 33,686; and for arhar it is Rs 26,480 per hectare.
Although only 6 per cent farmers, as per the Shanta Kumar Committee, get the benefit of MSP, the fact remains that the announcement of MSP neither helps in setting a floor price nor does it guarantee an assured price for farmers.
This is primarily because the mandate for the CACP, which works out the MSP for various crops, is not only to provide an assured price to farmers but also to ensure that it does not lead to inflationary pressures.
The macro-economic policy has a lot to do with the prevailing farm crisis. The prices have been kept low, and in most cases actually less than even the cost of production.
The MSP the government announces actually includes out-of-pocket expenses incurred by farmers in crop cultivation (A2 cost) plus the cost of hiring farm labour (FL), including family labour, a farmer employs.
In addition to this cost, which is labelled as A2+FL, the government claims that the MSP being announced since the beginning of the kharif season last year contains 50 per cent profit.
Although the government asserts that it has honoured the recommendation of the Swaminathan Commission, which had suggested 50 per cent profit over the comprehensive cost, the new formula falls short of what was in reality recommended.
Nor has the government been able to ensure that procurement is made at the MSP it has announced.
Several farmer leaders have questioned the government's claims, and the trade data showing the shortfall in prices paid to farmers in various mandis is routinely shared on social media. Farmers need to be headed.