Vishal Mandal, a 3rd year student of Symbiosis Law School, Pune analyzes the MSP Bill and it’s implications on the farmers.
A] What is Minimum Support Price?
Minimum Support Price (MSP) is a form of market interference by the government to insure agricultural producers against any sharp fall in prices. The government announces the MSP at the beginning of the sowing season on the recommendations of the Commission for Agricultural Costs and Prices (CACP). The MSP is a guaranteed price for the farmer’s produce by the Government. The aim is to support them from distress sales and to buy food grains for public distribution.
The current scheme of MSP is itself built with many flawed implementations. The government announces the MSP for different products, which is uniform throughout the country. However, the government only buys some products on a large scale like paddy and wheat. Other produces are purchased in meagre numbers. The farmers producing products other than paddy and wheat have to incur a loss by selling it at lower costs in the market.
Recently, the Union Cabinet chaired by Prime Minister Modi approved an increase in MSP of Kharif crops. Since there is a scarcity of labour, increased prices of fertilisers and pesticides etc., the farmers are already facing many challenges amidst the corona crisis. Hence, this increased MSP comes as a relief for many farmers. But is the MSP provided by the government sufficient for them considering the rise in the number of farmer suicides?
B] Why Minimum Support Prices (MSP) laws are required?
The prices of food for the consumers are secured by legislation like the National Food Security Act, 2013 and the Essential Commodities Act, 1955. The same cannot be said for farmers. The price for the farmers produces has no legislative backup. The last two decades have seen more than 3,00,000 cases of suicides by farmers. Only crop failures and the inability to sell agricultural products have led to 19.5 % suicides.
In Olga Tellis vs. Bombay Municipal Corporation, the Supreme Court held that the right to livelihood is essential under Article 21. On a combined reading of Article 38(2) and Article 39(a), it necessitates that the State must take measures to secure adequate means of livelihood. Also, under Article 43, the state by suitable legislation has to ensure a decent standard of life to all the workers of agriculture.
Hence, under these provisions, it can be said that the fundamental rights of farmers are infringed who are deprived of a chance to provide a decent livelihood to themselves and their families.
To protect these fundamental rights, the Uttarakhand High Court in the case of Dr. Ganesh Upadhyay vs. Union of India and Others had suggested the Governments to come up with suitable legislation providing legal backing to MSP. The court stated that these legal rights would secure them adequate means of livelihood under Article 21. Subsequently, CPAC also recommended the government to make laws regarding MSP.
C] Recent Development
An effort was made recently to give MSP a legislative colour. The Bill was introduced in the year 2018 by the MP Shri Raju Shetti. He introduced two bills simultaneously for protecting the rights of the Farmers. The bill for MSP is now pending in the Parliament namely, “The Farmers’ Right to guaranteed remunerative Minimum Support Price for agricultural commodities Bill, 2018”. The author will try to analyse the provisions of this bill in light of the MSP issues faced by the farmers.
II. Critical Analysis of the Provisions
The bill has a lot of basic provisions which should have been implemented by the government on their own as a part of their duty. However, on the failure of the government to perform such duties, the bill now mandates the governments to perform them.
A] Salient Features
1) Legal Right to Minimum Support Price: The Section 3 of the bill confers the right on every farmer to guaranteed remunerative MSP. The MSP for the produce should have at least a 50% profit margin above the comprehensive cost of production.
2) Equitable Representation from different sectors: Section 8 of the bill lays out the composition of the Central Commission. It advises the government to take into consideration equitable representations from various sectors, genders and states on a rotational basis. The provision ensures non-exploitation of the power and each sector having a say in the decision-making process.
3) Promoting advantageous commodities: The bill takes a step ahead and recommends the government to provide incentives on commodities which provides social and environmental benefits under section 10. This helps the government in achieving other goals, such as Sustainable and Environmental development.
4) Duty to provide Minimum Support Price: An additional duty is laid down for the State governments to ensure the prices decided by the commissions is received by the producer from all buyers. The trader escaping to pay the MSP will be held as a cognizable offence under Section 26. The bill formulates a state fund which will compensate the farmer who did not receive MSP for his produce. The farmer will be paid the difference amount of the MSP and price of sale from the fund. The Central Government under section 20 also has to prevent the import of subsidised agricultural commodities which is below the Minimum Support Price so that it does not affect the sale of domestic farmers.
5) Better access to market and faster payments: Since the farmers in the remote areas are not able to sell their produce because of the unavailability of procurement centres, the bill directs the States to open an adequate number of procurement centres. The bill also provides for some instructions in this regard. The procurement centres need to be set up four weeks in advance of the harvest with enough publicity of the operation of these centres. The payment to the farmer should be necessarily be made on the same date.
1) Inconsistent Provisions: There is an evident blunder in two sections of the bill. Section 10 requires the Central Commissions to make recommendations of MSP before 15th of February and 15th of July for the Kharif and Rabi seasons respectively. However, in section 6, the central government is given a months’ time after receiving the recommendation to announce the MSP. But the MSP must be announced before 28th February and the last day of July. Now considering a situation where the commission makes the recommendation on the last day i.e. 15th February for Kharif crops, the government will not have a month to announce the prices since it cannot be after 28th February.
2) Fallacious Autonomy: Section 8 provides for the establishment of Central Commissions as an autonomous body by the government. Since the bill gives the power of appointment and removal to the selection committee comprising of Prime minister and other members of the opposition along with the Ministry of Agriculture and Farmers Welfare, it cannot be completely autonomous and free from political influence.
3) Inadequate redressal system: The bill also provides for grievance redressal. A committee has to be formed, which will follow a simple verification procedure to resolve grievances. The complaints filed should be resolved within a month, making it fast and cost-effective. The bill, however, fails to provide for any appellate forum in case of an appeal.
There is no doubt that the farmers in India are still being exploited in various manners. The need to ensure adequate returns in agriculture is not only important for the livelihood of the farmers but also essential to safeguard the food security of the nation.
The MSP, this year, was announced on June 1 by the Government whereas under this bill the government will announce the prices before 28th February for the Kharif season. Hence, farmers will be able to make an informed choice.
The MSP announced to the farmers without any legal remedy is equivalent to the Fundamental rights without Article 32 to enforce them. Henceforth, the legal provisions will ensure the MSP to the farmers who will not have to sell their produce below the MSP and incur losses. This Bill will also play a really important part of the Government’s target of doubling the farmers’ income by 2022 and in reducing their debts. Hence, the bill should be passed at the earliest for the benefit of everyone with the suggested changes.
Vishal Mandal is a third year student of Symbiosis Law School, Pune.
Minimum Support Price, Vikaspedia, https://vikaspedia.in/agriculture/market-information/minimum-support-price.
Organisation, Commission for Agricultural Costs & Prices, https://cacp.dacnet.nic.in/content.aspx?pid=32.
Minimum Support Prices (MSP) for Kharif Crops for marketing season 2020-21, Press Information Bureau, https://pib.gov.in/PressReleasePage.aspx?PRID=1628348.
The National Food Security Act, 2013.
The Essential Commodities Act, 1955.
P. Sainath, Nearly 2 lakh farm suicides since 1997, (December 17, 2016), https://www.thehindu.com/opinion/columns/sainath/Nearly-2-lakh-farm-suicides-since-1997/article16814644.ece.
Olga Tellis v. Bombay Municipal Corporation, AIR 1986 SC 180.
Article 21, The Constitution of India, 1950.
Article 38(2), The Constitution of India, 1950.
Article 39(a), The Constitution of India, 1950.
Article 43, The Constitution of India, 1950.
Dr. Ganesh Upadhyay v. Union of India and Others, Writ Petition (PIL) No.105 of 2017.
Sanjeeb Mukherjee, A right to sell at MSP: CACP wants legislation to ensure farmers benefit, Business Standard, (July 6, 2018), https://www.business-standard.com/article/economy-policy/msps-hiked-but-debate-continues-to-ensure-farmers-don-t-get-a-raw-deal-118070500080_1.html.
IMPORTANT – Opinions expressed in this article are the sole responsibility of the author and do not necessarily reflect the views of IJOSLCA.