Minimum Support Price (MSP) is a mechanism to ensure that farmers get remunerative returns. However, the first day of the MSP Satyagraha discovered that the implementation of MSP is riddled with inefficiencies which are causing a monetary loss to farmers.
Yogendra Yadav, President, Swaraj India said, "The first day of the MSP Satyagraha unearthed some shocking results. A public hearing with farmers at the APMC mandi in Yadagiri uncovered that the losses for farmers on their tur crop alone totalled Rs 79 crore in this district."
"If current procurement trends for Channa (Bengal gram) continue then the losses could be Rs 12 crore and ₹ 33 crore for groundnut," he added.
Tur, the second most important crop in this district in northern Karnataka is a case in point. The procurement window for the lentil is almost over and only 2.76 lakh Quintals, less than half of the district's output of 6.5 lakh quintals, was procured by the government. This would led to a loss of ₹ 79 crore for farmers, for Kharif season 2017-18.
These were the stark findings after a public meeting with farmers at the mandi today. The Jai Kisan Andolan and Swaraj Abhiyan's, along with Karnataka Rajya Rythu Sangha organized today's meeting, where farmers were invited to speak about the difficulties they faced in getting prices for their crops. Officials from the APMC committee also joined this dialogue with farmers.
The case of Channa (Bengal Gram) and ground nuts is illustrative. Although the procurement window for Channa has just started, the Government claims to have procured about 10% of the produce although no farmer seemed to be aware of it. If current trends of procurement continue losses for chana in the district could amount to ₹ 12 crore. The losses in groundnuts, for which there is no procurement here, could be ₹ 33 crore.
Farmers at Yadgir mandi spoke about the problems surrounding the MSP regime. Some farmers were forced to sell their crops to private buyers outside the MSP rate, thus incurring a direct loss. Manjunatha Mallanagowda, a farmer from Yadagiri, sold his Moong crop to the government 5 months ago, but still hasn't received the money.
Farmer Malliayya incurred a loss of ₹ 3,428 by selling 2.4 quintals of cotton to private vendors at a price below MSP.
Many farmers were not even aware where the procurement centres were or of the MSP rates or when procurement started, thus highlighting an information asymmetry.
The main findings from the public hearings were as follows.
Tur: The Karnataka government offered a higher MSP of ₹ 6,000 but restricted procurement to about 35 lakh Quintals (on production of 90 lakh Quintals). A ceiling of 4 Quintals/acre, subject to a cap of 20 Quintals per farmer, was introduced, which was subsequently reduced to 10 Quintals.
Chana: Government claims 7 purchase centres have begun procurement in Yadagiri district, but farmers are not aware of it. They said the government has closed down 11 centres and much of the current procurement is from traders, not farmers.
Groundnut: No farmer was aware of the MSP and no procurement has happened in Yadagiri district. But the crop sells for ₹ 600 below MSP of ₹ 4,450.
Paddy: low grade rice fetches a price higher than MSP, but the most popular crop in the area is fine rice Sona Masuri for which no MSP has been declared.