In the midst of ongoing farmer protests in India, Ramesh Chand of NITI Aayog expressed concerns over making Minimum Support Price (MSP) a legal right; "If the government is willing to give assurance, farmers should treat it as a sort of guarantee." He also believes making it a law could make the market less flexible, and potentially lead to inflation.
The farmer protest, organised by groups primarily from Punjab, Haryana, and Uttar Pradesh, have two major demands; one, MSP should be written into law, and two, the calculation of MSP should include assumed rent (even in case of owned land) as well as some capital cost.
Chand said since rentals vary across regions, it is difficult to assess the actual impact of any MSP revisions after accounting for it. However, "Roughly, I can say that this cost will increase by something 25 to 30%." This means these grains and pulses could become costlier for final consumers.
Making MSP legal will also introduce rigidity into the agricultural system, as it doesn't adapt to changing market demands or consumer preferences. "If it is legal, you have to go to Parliament to change the law to make it consistent the changes in demand...resource allocation needs to change to the things which are now needed more by consumer than a while back," he noted.
Chand suggests maintaining flexibility, which means giving the farmers a higher price if demand conditions are right and market can afford it.
Also Read
Farmers from Punjab began their march to Delhi on February 13 but were stopped by security personnel at the Shambhu and Khanauri border points between Delhi and Haryana. The protesting farmers have been camping at the border points.
Besides a legal guarantee on MSP and revised MSP calculations, the farmers are demanding the implementation of the Swaminathan Commission's recommendations, pension for farmers and farm labourers, farm debt waiver, withdrawal of police cases and "justice" for the victims of the Lakhimpur Kheri violence, reinstatement of the Land Acquisition Act, 2013 and compensation to the families of the farmers who died during a previous agitation in 2020-21.
The 'Delhi Chalo' march is spearheaded by the Samyukta Kisan Morcha (Non-Political) and the Kisan Mazdoor Morcha.
For more details, watch the accompanying video
First Published: Feb 23, 2024 12:27 PM IST
Check out our in-depth Market Coverage, Business News & get real-time Stock Market Updates on CNBC-TV18. Also, Watch our channels CNBC-TV18, CNBC Awaaz and CNBC Bajar Live on-the-go!
