- The Budget had promised to set MSP at 1.5 times the cost of production
- MSP is a guaranteed price for the farmer's produce
- Last year saw many protests from farmers all over the country over MSP
The Narendra Modi government has cleared a new list of minimum support price for 14 summer (kharif) crops -- the biggest in its tenure that will cost the state nearly Rs 15,000 crore in public funds. The minimum support price for paddy has been hiked by Rs 200, or about 13 per cent, and the rest by up to 50 per cent. The decision, taken by the Union Cabinet headed by Prime Minister Narendra Modi, comes less than a year before next general elections.
Also, by the end of this year, assembly elections will be held in three BJP-ruled states - Rajasthan, Madhya Pradesh and Chhattisgarh - where farmers, already restive, form a chunk of the population
The delay in implementation of a big hike in support prices -- one of the pre-election promises of the BJP -- has triggered huge protests by farmers in many parts of the country.. They also had the support of the opposition, which has highlighted farmers' suicides to accuse the government of being insensitive to farmers' demands. While the move is expected to boost the rural economy, there are concerns that it could translate into food inflation.
Called it a "historic decision" by the NDA government, Home Minister Rajnath Singh said, "Farmers are the largest producer, consumer and customer in this country but they never got the price they deserved for their produce. Modi ji understood this and now farmers will get 1.5 times more MSP on their produce."
PM Modi, who has promised to increase farm incomes, tweeted:
मुझे अत्यंत खुशी हो रही है कि किसान भाइयों-बहनों को सरकार ने लागत के 1.5 गुना MSP देने का जो वादा किया था, आज उसे पूरा किया गया है। फसलों के न्यूनतम समर्थन मूल्य में इस बार ऐतिहासिक वृद्धि की गई है। सभी किसान भाइयों-बहनों को बधाई।- Narendra Modi (@narendramodi) July 4, 2018
The MSP is like a shock absorber by the government to safeguard farmers against any sudden fall in produce prices. The MSP is a guaranteed price for their produce. In February, Finance Minister Arun Jaitley while presenting his fourth budget in the Modi government, promised to set MSP at 1.5 times the cost of production.
The government was regularly attacked by farmer associations and the opposition for making "hollow promises" about doubling their income by 2022.
Congress President Rahul Gandhi had accused the prime minister of "finishing the farmer". He said, "The government has to help the farmer. How will that happen? Through MSP and loan waivers. In the absence of such measures, small farmers are unable to make any money."
Last year saw massive protests by farmer associations across the country over MSP and loan waivers. It started last summer in Madhya Pradesh, where six farmers were killed in police firing, and spread to other states where farmers destroyed fresh produce in symbolic protest. In March, it took shape of the colossal Kisan Long March in Maharashtra, in which around 50,000 farmers walked 180 km from Nasik to Mumbai.
Last month, farmers across the country held a 10-day "Gaon Bandh", during which thousands refused to send supply of fruits, vegetables and dairy products to cities.
According to the list, the MSP of common grade paddy has been fixed at Rs 1,750 per quintal. The MSP for top variety cotton will be Rs 5,450, up from 4,320 per quintal. The price for two varieties of pulses -- urad (lentil) and tur -- will see a revision of about Rs 200 per quintal.