On a day when Bharat Bandh is observed across the country against the Centre’s new farm laws, let us know why farmers think MSP-based procurement at Mandis may not continue in the future.
What is MSP?
The Minimum Support Price (MSP) scheme, which has existed for decades, guarantees farmers a guaranteed income and is applicable throughout India. If farmers don't get a better price in the markets for MSP covered crops, the government will buy farmers' agricultural produce at a fixed rate.
What is APMC?
APMC (Agricultural Produce Marketing Committee) is a government-run wholesale market. For their goods here, farmers are assured of a minimum price. They negotiate with licensed agents and resolve conflicts, if any and acquire storage and soil testing services.
How is MSP fixed?
The Agricultural Prices Commission was set up by the government to fix MSPs for crops. The Commission was renamed in 1985 as the Agricultural Costs and Prices Commission (CACP).
On the basis of the recommendation made by the Commission for Agricultural Costs and Prices, the Government of India declares the minimum support prices for certain crops every year at the beginning of the agricultural season. Today, under the MSP scheme, 24 crops are covered.
The MSP is the rate at which crops are purchased from farmers by the government and is based on an estimate of at least one and a half times the production costs incurred by farmers.
Why are farmers worried?
Farmers' unions want a formal guarantee from the government that the MSP regime will continue. They fear that new farm laws will phase out MSP-based procurement at Mandis eventually. In the coming years, they want MSP-based procurement to continue at Mandis.
They have objections over agricultural sales beyond regulated APMC mandis (government-approved wholesale markets).
Now the protesting farmers are worried that once APMC mandis weaken after the implementation of new laws, and this protection assured as now will vanish in the future. They argue that conditions of purchasing from farmers will be set by exploitative private players.
