Farmers Protest: Only 6% of farmers get benefit of MSP, majority of them in Punjab and Haryana

Farmers from states like Punjab and Haryana are up-in-arms against three news laws related to farming. They are worried that the new legislation may eliminate the Minimum Support Price (MSP) on their yield.

There is also a reason for farmers of Punjab and Haryana to oppose these three new laws. A central government committee report states that only 6% of the country's farmers take advantage of MSP.

These two states also have the highest number of farmers. A 2016 NITI Aayog report states that 100% of farmers in Punjab sell their crops at MSP. However, it did not give Haryana data. 

Prime Minister Narendra Modi and Agriculture Minister Narendra Singh Tomar have made it clear that the MSP is not going to end. But four questions are still lingering:

What does MSP stand for?

MSP means Minimum Support Price, which is the guaranteed price that a farmer gets on his crop. Even if the prices of that crop are low in the market, fluctuations in the market prices should not affect the farmers. They continue to get the lowest price for their crop.

The places we have gone through so far, show that only 6% of the farmers in the country get the benefit of MSP, out of which the maximum number of farmers are from Punjab and Haryana. It is due to this reason that opposition to these new laws is visible in both these states.

How is MSP fixed? And how much MSP increased in the Modi government?

The commission for Agriculture Costs and Prices (CCAP) determines how much MSP of a crop. The government decides the MSP only on the recommendation of CCAP.

If the bumper yield of a crop falls, its prices fall, then the MSP acts as a fixed assurance price for the farmers. In a way, it is like an insurance policy to protect farmers when prices fall.

Currently, 22 crops are being procured under MSP. These 22 crops include paddy, wheat, sorghum, millet, maize, moong, groundnut, soybean, sesame, and cotton.

How many farmers now get the benefit of MSP every year?

The first thing is the number of farmers in the country. The government has no data on this. However, under the PM Kisan Yojana, 14.5 crore farmer families get Rs 6,000 every year. This shows that there are at least 14.5 crore farmer families in the country. Now comes the issue, how many farmers get the benefit of MSP every year?

On September 18, the Minister of State for Food and Public Distribution, Raosaheb Danve Patil, told the Rajya Sabha that as of September 9, there were 43.33 lakh farmers taking advantage of MSP on wheat during the Rabi season.

Of these, 10.49 lakh were from Punjab, and 7.80 lakh were from Haryana. That is, more than 42% of the farmers were from Punjab and Haryana.

Whereas the number of farmers selling paddy on MSP in the kharif season was 1.24 crore. Of these, there were 11.25 lakh farmers from Punjab and 18.91 lakh farmers from Haryana. More than 25% of the farmers were from Punjab and Haryana.

According to the government, the number of farmers selling paddy crops on MSP in the Kharif season increased by 70% in 2019 compared to 2015. Similarly, the number of farmers taking advantage of MSP on wheat during the Rabi season also increased by 112% in 2020 compared to 2016. The procurement has not yet started for the Kharif season 2021.

But, the government does not buy even half of the yield every year. The MSP that the government fixes on crops buys crops from farmers at the same price. Statistics show that the government did not buy even half of wheat and paddy yield in the last five years.

According to the Food Corporation of India (FCI), in 2015, 1.044 lakh tonnes of paddy were produced, of which 342 lakh tons, i.e., 33%, were purchased by the government.

Similarly, in 2019-20, paddy yield was 1,179 lakh tonnes, of which the government purchased 510 lakh tonnes, i.e., 43%. 

Along with this, 923 lakh tonnes of wheat were produced in 2015, out of which the government purchased 230 lakh tonnes, i.e., 25% wheat. Whereas, 1,072 lakh tonnes of wheat was produced in 2019, of which 390 lakh tonnes, i.e. 36% of the wheat was purchased by the government.