Context
∙ The first of the 12 demands made by protesting Punjab farmers was for a legal guarantee to MSP, and for the determination of crop prices as per the recommendations of the Dr Swaminathan Commission.
About
∙ On November 18, 2004, the Ministry of Agriculture constituted a National Commission on Farmers (NCF) under Prof Swaminathan.
∙ The NCF submitted five reports in favor of farmers, and made several recommendations, including on MSP but it did not recommend either a legal guarantee for MSP or the formula for its calculation that the farmers’ unions are now demanding.
∙ The 10-point terms of reference of the commission, included suggesting a “comprehensive medium-term strategy for food and nutrition security”, and ways of “enhancing productivity, profitability, and sustainability of the major farming systems” in the country.
Major Findings/Recommendations
Public investment:
∙ The acute agricultural distress in the country, is the symptom of a deep seated malady arising from inadequate public investment and insufficient public action.
Marketing:
∙ Trading :The Commission recommended futures and options trading in agricultural commodities, with supervision and regulation by a “SEBI like autonomous body”.
∙ Risk factors: The risk factor and the marketing and post harvest expenses which are not taken into account while deciding MSP by CACP, which could look into.
∙ Amend acts: There is an urgent need to undertake a review of the Essential Commodities Act and other legal instruments covering marketing, storing and processing of agricultural produce.
Women farmers:
∙ It called for the setting up of a National Board for New Deal for Women in Agriculture under the Union Food and Agriculture Minister.
MSP:
∙ MSP should be at least 50% more than the weighted average cost of production.
∙ As such, “The ‘net take home income’ of farmers should be comparable to those of civil servants,” the report said.
∙ Consider cost escalation: Purchase by Government should be MSP plus cost escalation since the announcement of MSP. This will be reflected in the prevailing market price.
∙ Avoid delay: Delay in issue of the Minimum Support Price (MSP) particularly in respect of Kharif crops needs to be avoided.
∙ Regional balance: Implementation of MSP across regions needs improvement as it is highly concentrated in Punjab, Haryana, UP, and Andhra Pradesh.
∙ Continuation: Despite weaknesses, MSP may have to be continued in the foreseeable future and its implementation improved.
∙ Formula to determine prices: The swaminathan panel referred to earlier Committee on Long Term Grain Policy, 2002 led by economist Abhijit Sen.
∙ It recommended C2 cost of production (i.e., all costs including imputed costs of family labour, owned capital and rental on land) in more efficient regions and A2 + FL costs (i.e., costs actually paid plus imputed value of family value labour) for relatively high cost regions.
∙ But this recommendation did not find mention in the recommendations of the Swaminathan Commission.
Innovation:
∙ Farm Schools should be established in the fields of innovative farmers, in order to spread their message and methods.
∙ Promoting 50,000 Farm Schools across the country will require an investment of Rs 150 crore, the report said.
∙ Establishing a grain bank and community food and fodder banks, promoting insurance, and setting up a national network of advanced soil testing labs.
Contract farming:
∙ Report of the NCF titled From Crisis to Confidence recommended a farmer centric ‘Code of Conduct’ for contract farming arrangements, which should form the basis of all contract farming agreements.
∙ Also encourage development of farmer’s groups/ organisations to negotiate with the purchasers and take care of the interests of the small farmers.
APMC:
∙ The State APMC Acts need to be amended to provide for…encouraging the private sector or cooperatives to establish markets, develop marketing infrastructure and supporting service.
∙ Market fee and other charges need to be rationalized.
PDS:
∙ Government should procure the staple grains needed for PDS at the same price private traders are willing to pay to farmers.
CACP:
∙ The Commission for Agricultural Costs and Prices (CACP), should be an autonomous statutory organization with its primary mandate being the recommendation of remunerative prices for the principal agricultural commodities of both dry farming and irrigated areas.
