The Author, Mr. Rubinder Ghumman is an Advocate practising in the Supreme Court of India.
The farmers have been demanding for legal guarantee of MSP. However, the Govt says if Minimum Support Price hasn’t been a legal guarantee so far, why it should be now guaranteed.
MSP was introduced before 1970 by Central Govt to protect farmers from the wild price fluctuations. However, all farm produces didn’t come under the MSP regime. At present there are 14 farm produces like wheat, Rice, Ragi etc which are covered by MSP. But, the MSP was not a legal guarantee. Its not strictly binding on the States. Even then, the State Govt’s banked on MSP and enforced it on APMCs by setting MSP as floor price. If there were no takers at MSP rates in APMC, the the Central Govt bought farm produces under Procurement Scheme for distribution under the Public Distribution System. MSP worked in tandem with PDS. The farmers thought, MSP is their legitimate expectation.
Thd new legislation namely Farmers' Produce Trade & Commerce (Promotion & Facilitation) Act, 2020 has knocked out the bottom of APMC by permitting free trading outside the APMC but within trade area by farmers and corporates. The second legislation Farmers (Empowerment & Protection) Agreement on Price Assurance & Farm Services Act, 2020 while regulating farming agreement between farmer and purchaser or corporates called as sponsor. However, Section 5 of second legislation assures “guaranteed price”. Sec 5 is as below:
“5. The price to be paid for the purchase of a farming produce may be determined and mentioned in the farming agreement itself, and in case, such price is subject to variation, then, such agreement shall explicitly provide for—
(a) a guaranteed price to be paid for such produce;
(b) a clear price reference for any additional amount over and above the guaranteed price, including bonus or premium, to ensure best value to the farmer and such price reference may be linked to the prevailing prices in specified APMC yard or electronic trading and transaction platform or any other suitable benchmark prices:
Provided that the method of determining such price or guaranteed price or additional amount shall be annexed to the farming agreement.”
The guaranteed price is nothing but price agreed to be paid by purchaser despite variations in price. It’s not same as MSP. If MSP had been prescribed in Sec 5, then purchaser or corporates couldn’t have entered into farming agreement with farmers to sell his produces at a price less than MSP. Therefore, the farmers forced by indebtedness etc are likely to be compelled to sell their farm produces at a lower price dictated by the purchaser or corporates. The new law in Sec 5 only guarantees agreed or guaranteed price and nothing more. This exploitation is likely to occur in buyers market or in the market where there is less demand for farmers products.
Hence, the farmers demand for prescription of MSP under the law is a legitimate demand. The fact that it was not prescribed hitherto has no substance. Because, as stated above, the MSP fixed by the Central Govt by administrative order was implemented by the State Govt through APMC which was the exclusive place to trade the farm produces. When APMC market is knocked out and outside trading is permitted by giant corporates under new law, legal guarantee of MSP becomes necessary to protect farmers from exploitation. The present administrative orders fixing MSP have no legal validity. The orders cannot overrule the farming agreement freely entered into by farmers though under compelled conditions of indebtedness etc.
Further Aartia is the backbone of a Farmers. He is available 24× 7. No strict rules or Paperwork or mortagae or exploitations unlike Banks. Even the Petrol pump owner near a village gives these small land farmers diseal to do argriculture for 6 months till there crop is sold and they return the money. This is how the economy of the villages is run unlike cosmos or metros. If a daughter of a village is married, its the daughter of entire village .If someone doesnt have work and his family is starving , its the duty of entire village to feed him . The Paanchayat give them shyamlat (village land) to till and cultivate for 5 years so that they can stand once their feet and lead a respectable life.This is done in consultation of paanchayat and influential family members of the village.This is our system of governance. Indeependent!
