AIKS Proposals To Commission For Agricultural Costs And Prices

Ensure Stable and Remunerative Crop Prices:

The world commodity markets are witnessing drastic price falls and our farmers are exposed to the vagaries of the volatile world market prices. The Indian peasantry can be protected from such effects only if the Government puts in place an effective procurement policy complemented by remunerative support prices. In this regard the suggestion of the National Commission on Farmers to institute a Price Stabilisation Fund has to be implemented. It also entails a complete Ban Futures Trading which introduces speculative trading into agriculture. Currently there is an urgent need for price and income support to farmers in general and the growers of export crops in the wake of shrinking world demand and declining prices in particular. There are already indications of a crash in prices for many of the commercially cultivated export crops. This is due to the inadequate demand in the world markets for products like cotton, pepper, rubber, etc. A look at the price trend for an year or a couple of years reveal that the high price periods for such crops have been short and in most cases, the current crisis is pushing the prices to levels that are much below than that at the start of the growing seasons. This implies that farmers who were induced to shift to these crops due to the high export prices stand to be completely ruined and would accumulate sizeable losses due to the investments that they have already undertaken for growing these crops. These price trends imply that the growers of these crops stand to lose heavily from the current slump in output prices. In order to mitigate such losses and prevent any withering of livelihoods in the rural areas, it was ardently required that certain measures like revamping the marketing boards or making certain allocations for building a Price Stabilization Fund. The latter could have been used to provide a ‘minimum living price’ to the farmers in the face of the crisis. This is all the more necessary as a large part of the agrarian crisis that has precipitated over the last decade has been in the dry-land areas mainly cultivating export-oriented commercial crops for which prices are relatively more volatile. Many cash crop cultivators, who had begun their sowing operations on the basis of crop prices determined by the relative prices of just a few months ago, now find that their cultivation is simply financially unviable at prevailing input and output prices. With particular regions of the country, including some of the fragile dry-land areas, increasingly dominated by such cash crop cultivation (such as Cotton, Groundnut and Soya bean), it is not difficult to imagine what will happen to livelihoods in these cases.  This is a major economic catastrophe that is not just waiting to happen – it is already unfolding. So a series of monetary and fiscal packages that do not even mention, let alone address, the inevitable problems of cash crop cultivation, is bizarre, to say the least.

 Ø       Enhance Minimum Support Price And Provide Incentives For Production:     As per government data, rice is being cultivated on an area of over three million hectares as of 26 June 2008, against the 2.84 million hectares in the corresponding period last year. The official estimates put rice demand in India at 128 million tonnes for 2012 and will require a production level of 3,000 kg per hectare against the present average yield of 1930 kg per hectare. The government has set a production target of 129 million tonnes of rice by 2011-12. The Policy perspective of the Government however, betrays a total disregard for the needs of the paddy growers who have no incentive to cultivate more at the low prices. The dismissive attitude towards the MSP proposed by peasant organisations as well as State Governments branding estimated costs of paddy production put out by them as being “much higher” than those estimated under the “Comprehensive Scheme” of the Directorate of Economic and Statistics is indicative of the total insensitivity to the crisis faced by the cultivators.                       

In the case of Cotton too the The Amaravati Divisional Commissioner had suggested way back in 2006 that the MSP for Short Staple Cotton should be Rs.3500/Qtl while the MSP suggested by the CACP in 2008-09 was far below it. In the wake of the falling prices there is a need for providing effective price support to our farmers. The approach to the plight of the sugarcane farmers is also one of total insensitivity. The MSP fixed by the Government is far below expectations. In the case of Coconut there is need for having higher import duty on coconut oil and remunerative prices for the produce is required to protect our farmers from total collapse. The estimated costs of production which is taken into account are often far below the actual expenses incurred and MSP fixed on that basis does not adequately compensate the cultivators. Against a backdrop of sky-rocketing global commodity and crop input prices, the Swaminathan committee had suggested MSP be computed as C2 plus 50% level. In times of recession it is not adequate enough to have such a computation alone as it does not provide proper stimulus to production, let alone increase productivity. Currently, in three crops paddy, wheat and rapeseed-mustard they are only above the 50% cost-plus level. In cotton, maize, groundnut, lentil, bajra, arhar and urad, the MSPs now are 20-30% above C2 and in others between 10 and 20%.

Our specific proposals for the MSP of various Kharif Crops are attached herewith. The eventuality of the CACP proposals being disregarded as in the case of paddy and other crops during the last year taking refuge in flimsy grounds will make any exercise like the present one futile and the CACP will itself be relegated to a position of redundancy.

 Ø       Timely Fixation of Minimum Support Price (MSP): In India, kharif crops, which are sown between June and September, account for more than half the total grains production. The Commission is required to convey its recommendations to the Government well before the sowing season of the crop. However, the MSP fixation is usually announced only by the time of harvest. The small and marginal farmers under circumstances of acute agrarian crisis are thereby forced to make distress sales and also sell at below MSP to private dealers. The AIKS proposes that it must be mandatory upon the Government to announce the MSP well before the crop sowing season in June.

Minimum Support Price Of Kharif Season 2009-10

Proposed By All India Kisan Sabha

Notes:-

Wheat- One of the major crop of our country is WHEAT. Inputs prices are increasing day by day. The present MSP does not meet the cost of production. The Govt. of India in past had paid upto Rs. 1400 Plus per quintal for  Import of wheat. All India Kisan Sabha proposes Rs. 1500 per quintal M.S.P. for wheat.

$ An additional incentive bonus of Rs. 50 per quintal is payable over the Minimum Support Price (MSP).

$$ An additional incentive bonus of Rs. 100 per quintal is payable over the Minimum Support Price (MSP).

*The Amaravati Divisional Commissioner had suggested way back in 2006 that the MSP for Short Staple Cotton should be Rs.3500/Qtl

For fulltext in pdf format click here

[Please Contact Mr. Vijoo Krishnan for further details on AIKS activities in strengthening the movements of farmers and agricultural  working class in India. Address- 4 Ashoka Road, New Delhi  ]