Taxed through trade policies, farmers need stable income policy

Implicitly taxed through restrictive marketing and trade policies, farmers need a stable income policy.

farm distress, farmer loans, agri distress, farm sector crisis, msp, msp price, 2019 lok sabha elections farmers — A farmer sitting with his sacks of onion at a mandi. (Express photo by Amit Mehra)

The Narendra Modi government is entering its proverbial “last 10 overs”. All the stops are being pulled to win over targeted segments of society that could potentially bring the BJP/NDA back to office.

One important segment, perhaps the largest one, is that of farmers. The attempt to woo them by announcing higher minimum support prices (MSPs) based on 50 per cent margin over paid out costs plus imputed value of family labour (cost A2+FL) has fallen flat on its face as market prices of most of those commodities remain 20 to 30 per cent below MSPs. Procurement by government agencies has been limited, as they already have overflowing stocks that they cannot offload without incurring massive losses. The meagre budgetary provisions under the PM’s AASHA scheme to lift market prices have, therefore, failed to erase farmers’ nirasha (gloom). In any case, as highlighted in my last article (‘An answer to rural distress’, IE, January 7), the MSP policy cannot reach more than 20 per cent of peasantry even with augmented procurement of pulses and oilseeds, and, therefore, cannot be a solution to farmers’ distress.