New Delhi: The protesting farmers are demanding written assurances from the government regarding the MSP in the new agricultural law.
Although the government says that it is not ending the earlier MSP system, it is still a big problem for the government to guarantee the MSP, because if the government does so, it will spend a large part of the budget on the MSP itself.
Experts say that the government will need about 17 lakh crore rupees to buy all the crops on the existing MSP. The Central Government fixes the Minimum Support Price (MSP) for 22 crops every year on the recommendation of the Commission for Agricultural Costs and Prices. Of these, there are 14 Kharif season crops and six Rabi crops. Apart from this, MSP is also fixed for jute and copra. At the same time, the fair and remunerative price i.e. FRP for sugarcane is fixed.
However, the government purchases only paddy and wheat on the MSP on a large scale, as both these grains are required for the Public Distribution System (PDS) under the National Food Security Act. It is not possible that the government should buy all the crops from the farmers, so when the government buys up to one-third of the total production, then it is natural that the market price goes up there, farmers get reasonable prices. In some states, the government also buys maize and other crops.
Why is it difficult to make MSP mandatory
Mandatory procurement on MSP means private traders will also be forced to buy on it. Experts say that if procurement on MSP will be made compulsory for the private sector, then the international market will start importing when the prices of crops are high. In such a situation, the government will have to buy all the crops from the farmers, so according to today’s rate, the government will have to spend Rs 17 lakh crore. After this, one lakh crore rupees will be spent on fertilizer subsidy and one lakh crore rupees on food subsidy.
If the government has to buy all the crops, then there will be difficulties regarding its storage. In making the MSP mandatory, there will also be difficulties regarding the quality of the crop, because it has to decide which quality will be the MSP and what will be the rate of poor quality and who will buy from it.
To spend Rs 17 lakh crore on the purchase of all crops on MSP, the government will have to increase the tax by three times in the entire area, after which neither investment nor export nor employment will be created. Therefore, the imperative of MSP is an impractical demand.