Farmers' body seeks revision of Centre's MSP for crops

All India Kisan Sabha (AIKS) says that the central government did not follow cost formula recommended by the Swaminathan Commission while making its claim that the recently fixed minimum support prices (MSP) of Kharif crops are 50% more than the cost of production.

The government had on June 19 said that the increase in MSP for Kharif Crops for Marketing Season 2024-25 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the All-India weighted average cost of production. It estimated that the margin to farmers over their cost of production because of the MSP revision will be the highest in case of bajra (77%) followed by tur (59%), maize (54%) and urad (52%). For the rest of the crops, the margin to farmers over their cost of production is estimated to be at 50%, the government had claimed.

Refuting the claim, AIKS says that the government had in 2014 promised the farmers to implement the Swaminathan Commission recommendation of C2+50% method of cost calculation. C2 refers to comprehensive cost incurred, which includes the cost of inputs like seeds, fertilisers, pesticides, labour charges, machinery and fuel, (termed as A2), value of own labour by farmer and family (FL), and imputed rental value of owned land plus interest on fixed capital, rent paid for leased land etc. AIKS said the government has shifted the goal posts to A2+FL+50% formula, way below C2+50%.

According to the farmers’ body, the discrepancy in the cost calculation is further brought out when one takes the weighted average of State C2 Projections. “In Paddy, despite the fact that Andaman and Nicobar Islands and Jammu and Kashmir (both under Union Government) show absurdly low C2 costs of ₹1,000 per quintal (Qtl) and ₹1017/Qtl, the weighted average C2 costs would come to Rs.2,188/Qtl and C2+50% will be Rs.3,282/Qtl or Rs.3,555/Qtl if the two are excluded. In that case in Paddy the losses suffered by farmers will be even higher at ₹1,255/Qtl. Taking the example of Cotton as per the State C2 projections the C2+50% will be ₹11,163/Qtl or a loss of ₹4,042/Qtl. In Maize, the C2+50% as per State projection will be ₹3378/Qtl, implying that at current MSP losses incurred will be ₹1,153/Qtl. This is the situation for all crops as the calculations of the Union Government agency, Commission for Agricultural Costs and Prices (CACP) is way below the projection of the States," Ashok Dhawale, president of AIKS, says.

The organisation alleges that the central government has not taken into account the increasing costs of production like high fertiliser prices, irrigation costs etc., and has not considered the projections made by the States.

AIKS wants the central government to put on hold its MSP announcement until it revises it in consultation with the Samyukta Kisan Morcha (national coalition of farmer organisations).