Against the backdrop of the recent farmers 'march in the capital Delhi, it has become necessary to understand the farmers' question, 'guaranteed price' or 'minimum basic price'.
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The minimum base price of bajra is Rs. 1950 per quintal.
On 15th October 2018, the total arrival of bajra in Nawalgarh Mandi in Rajasthan was 4519 quintals. The average rate received by the farmers was — Rs. 1316 per quintal. Compared to the minimum base price, the loss incurred by the farmers in one day is Rs. 28 lakh 65 thousand 46.
The minimum base price of the flight is Rs. 5600 per quintal.
On 14th October 2018, a total of 4310 quintals were received in 12 market yards in Maharashtra. The average rate received by farmers is Rs. 5429. Compared to the minimum base price, the loss incurred by the farmers in one day is Rs. 7 lakh 37 thousand 10.
On 14th October 2018, the total inflow of Udda in Market 19 Yards in Gujarat was 3308 quintals. The average rate received by farmers is Rs. 4504. Compared to the minimum base price, the loss incurred by the farmers in one day is Rs. 36 lakh 25 thousand 568.
The minimum base price of soybean is Rs. 3399 per quintal.
On 10 October 2018, 21 Market Yards in Madhya Pradesh received 51500 quintals of soybeans. The average rate received by the farmers was Rs. 2889 per quintal. Compared to the minimum base price, the loss of farmers is 2 crore 62 lakh 64 thousand rupees.
The minimum basic price of rice is Rs. 6975 per quintal.
On 5th October 2018, 36 Market Yards in Maharashtra received 4990 quintals of rice. The average rate received by the farmers was Rs. 4933 per quintal. This means that farmers get Rs. The damage was 2042. Compared to the minimum base price, the loss of farmers in Maharashtra in a single day is 1 crore 1 lakh 89 thousand 580 rupees.
We call 'Minimum Support Price' as 'Guaranteed Price'. The Agricultural Prices Commission has been set up to fix the minimum basic price. However, the Agricultural Prices Commission only makes recommendations. The minimum base price is set by the Government of India.
It is a way of interfering in the market for the benefit of the farmers. The minimum base price is lower than the market price. If the market price goes below the minimum base price, the government intends to buy this price from the farmers.
The minimum base price is announced for only 26 agricultural products.
- Cereals
- Paddy
- Wheat
- Barley or barley
- Sorghum
- Millet
- Maize
- Sorghum
- Pulses
- Chana
- Tur
- Moong
- Urad
- Lentil
- Oilseeds
- Peanuts
- Mustard
- Sesame
- Soybean
- Sunflower
- Safflower
- Black sesame
- Toria
- Dried coconut
- Coconut
- Cotton
- Jute or hemp
- Cane
- Tobacco
Only wheat and cereals are procured regularly by the Central Government every year at the MSP. In selected states like Punjab, Haryana, Andhra Pradesh. Some states, such as Andhra Pradesh, sometimes intervene in the market by buying red chillies at government rates. Some states pay a bonus to farmers at the base price. Many researchers have shown that only 5-9% of farmers benefit from purchasing agricultural commodities at minimum basic price.
The farmers' movement led by Sharad Joshi raised fundamental questions regarding the minimum base price. The price based on the cost of production was the demand of their movement and still is today. For example, the minimum base price of trumpet is Rs. 5050 per quintal. However, the production cost of one quintal of turi is Rs. 7,000 per quintal, according to the activists of the farmers' association.
How to determine the minimum base price or the cost of production is a complex issue. The cost of production depends on many factors. The key is to use technology. With the advent of new technology comes a change in power relations. New technology is needed to increase agricultural production. High yielding seeds, agricultural technology include not only machinery but also the quantity of fertilizers, besides agricultural inputs, post harvest technology, godowns and many more. Growth in agricultural production depends not only on the hard work and knowledge of the farmer but also on technology. In such a situation, the power in agriculture does not remain in the hands of the farmers but in the hands of many government or private research institutes, inputs factories, markets. This can be called capital farming.
Modern technology plays a key role in increasing agricultural productivity. However, there is no guarantee that the technology that is effective in the field of agricultural college or university or research institute will produce the same amount of product and the same quality elsewhere. Because many machines or techniques cannot reach the field. Many factors such as where the farmland is, how the soil is, what the weather is like are important. Therefore, agricultural technology has to be adapted accordingly, it has to be modified to suit our field. Many inputs have to find alternatives.
Determining the cost of production of agricultural commodities in such a situation is a complex matter. The cost per acre of wheat production in Punjab is very different from the cost per acre in Maharashtra. For example, if I get 10,000 kg per acre and my neighbor farmer gets 500 kg, then the production cost is higher. Even if they both sell farm produce at the minimum base price, I make more profit. The simplest way to reduce production costs is to increase production.
In 2013, foodgrain production per hectare in Punjab was 4409 kg (irrigation 98.7 per cent), foodgrain production per hectare in West Bengal was 2732 kg (irrigation 49.3 per cent), foodgrain production per hectare in Tamil Nadu was 2386 kg (irrigation 63.5 per cent). And per hectare production of foodgrains in Maharashtra was 1198 kg (irrigation 16.4 per cent). Of course, Maharashtra's cost per hectare will be lower. However, the increased production cost of farmers in Punjab or Bengal or Tamil Nadu is divided by higher production. Dissatisfaction among farmers in Maharashtra is mainly among cotton, sugarcane, vegetable, onion and milk producers. The number of tire producers has increased this year but the reasons are different.
There are generally three types of capital farming. There is no shortage of land in the United States or Argentina or Brazil. Thousands of acres of farmland can be owned by one farmer. Plowing, sowing, spraying, harvesting are all done by awarding contracts to different companies. Even so, owning one is still beyond the reach of the average farmer. Without it, agriculture is not profitable. The second type is from China. Each farmer has an average of one and a half acre of land. However, the government has taken responsibility for irrigation, technology, inputs and agricultural markets. Therefore, the yield per acre there is double or triple that of India. In China, farmers do not own farmland. T
he situation in India is different. Here the farmer owns the farmland. Agriculture is on the list of both the Central and State Governments. The market is controlled. Both the government and farmers invest in irrigation. Seeds, Inputs are supplied by both the public and private sectors. Wheat and rice are procured by the government in some states, marketed by the government and private sector in some states, and in some states only private traders or companies procure agricultural commodities. Farmers in these countries have found a new way for smallholders to collect and process their produce and move up the value chain.
Co-operative sugar factories in Maharashtra and brands like Amul were able to stand out. Nestle has done the same experiment in Punjab while Dairy Dynamics has done the same in Baramati. The point is that the way for small farmers to collect their produce and move up the value chain is available in the public, private and co-operative sectors. This means that if different and innovative ways of collective farming are found, it is possible to increase the income of farmers by saving the cost of production, selling value-added agricultural products.
No product gets a rate based on the cost of production. Even industrial products. Therefore, the demand for such rates for agricultural commodities is not acceptable in principle and in practice. The prices of agricultural commodities are fixed in the market. But it is influenced by many factors. For example import-export policy. If onion exports are to be reduced, the government raises the export duty. As a result, our onions become more expensive in the international market. Reducing tariffs on oilseeds or palm oil reduces soybean prices.
It is demanded that the government should purchase agricultural commodities at guaranteed prices. That demand also contains facts. However, the question arises as to who the government should sell this commodity to. The difference between the market price and the guaranteed price is that the government pays the farmers less. The price conversion scheme was implemented by the Madhya Pradesh government. But it had the opposite effect. Traders bought farm produce from farmers at exorbitant prices and suggested that the difference be paid by the government. As a result, traders get goods at lower prices. They became rich.
There is another solution. That is, the state government used to work with private traders in purchasing agricultural commodities. In other words, the two of them used to buy agricultural commodities from the farmers at the minimum basic price. The difference between the spot market price and the minimum base price was given by the state government to the traders. The plan was suggested by the Policy Commission and approved by the Union Cabinet. This means that the central government shifted the responsibility of paying the minimum basic price to the farmers to the state government. The same policy was followed by the central government in the case of agricultural loan waivers.
The core issue is agricultural policy. That means a definite policy on the use of agricultural land. This policy should be decided keeping in mind that majority of the farmers in our country are minority or marginal farmers. It needs a consistent import-export policy. These policies should be centered on the domestic market. Not to be outdone by the international market.
The filling in McDonald's burgers is the essence of cabbage, cucumber, onion, etc. They are cheaper to import from America. It is a daydream that a small farmer in our country will compete with this farm. Some farmers will succeed. But they are not representatives of the peasantry. Neither the government nor any political party or farmers' organization has the guts to tell this matter to the people of the country, including the farmers.
Because everyone wants consumer goods. For this, capitalist development is being pushed. This development depends on the capital coming from abroad. Today, the rural market is full of foreign goods. And there is a situation where agricultural commodities do not even get the minimum basic price. That is, we have adopted a policy of colonising rural areas
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