Industry stakeholders welcome MSP hike, farmer activists criticise

New Delhi, June 8 (IANS) Stating that it will benefit farmers, customers and other stakeholders as a whole, industry stakeholders on Wednesday welcomed the government's decision of increasing Minimum Support Prices (MSP) for all mandated Kharif crops for marketing season 2022-23.

However, farmers' activists have come down heavily on the decision, terming the government rates a cruel joke for the famers.

Suresh Nagpal, Chairman, Central Organisation for Oil Industry & Trade (COOIT), an apex association of edible oils manufacturers, said the hike in MSP of oilseeds is a step in the right direction. "As farmers get a secured price for their crops, it will encourage more and more farmers to grow oilseeds as well as prompt them to shift away from grains."

"The area under oilseed cultivation has been on a steady rise over the last few years and with today's rise, we expect it to rise further. As a result of the secured price (MSP) provided by the government, the cultivation of mustard seed reached 91.44 lakh Ha during the last rabi crop season," he said.

"Needless to say, it will benefit farmers, customers and other stakeholders as a whole."

He also said that this will also afford a golden opportunity to India to become self-reliant in terms of oilseeds. "It would be great if some kind of diversification bonus is also announced for farmers shifting from grains to oilseeds and declare incentives up to rate difference for Soya De Oiled Cake (DOC) export so that plants will run at full capacity for crushing of soya seeds."

While announcing the new MSPs, the government said that the increase in MSP for Kharif Crops for Marketing Season 2022-23 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 50 percent over the All-India weighted average Cost of Production, aimed at reasonably fair remuneration for the farmers.

"Concerted efforts have been made over the last few years to realign the MSP in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift larger area under these crops and adopt best technologies and farm practices, to correct demand- supply imbalance," a senior official from the Agriculture Ministry said.

Kalyan Goswami, Director General, Agro Chem Federation of India, said: "The rise in MSPs of commodities such as oilseeds, pulses, nutri-cereals, and cotton has been higher than for paddy. This would encourage farmers to reduce the cultivation of water-intensive crops and would motivate for crop diversification. This would also help to reduce the import of oilseeds and pulses."

Goswami, however, flagged one concern. "While increased MSPs may boost rural income and purchasing power, this can also increase inflationary pressures further. To note, the wholesale inflation in April 2022 rose to 15.08 per cent, which is the highest in the last one-and-a-half decade. So the MSP hike needs to be worked out cautiously and logically, keeping all these factors in mind."

Yogendra Yadav, founder of the Jai Kisan Andolan - one of the 40-odd farmers' organisations that were part of the consortium Samyukt Kisan Morcha that took on the government against the now repealed three farms laws - said the inflation outlook for 2022-23 has been revised up to 6.7 per cent, from 5.7 per cent that the RBI had forecast earlier. The input cost - for diesel and fertilisers - has increased exponentially.

"If we compare the input cost to the revised inflation rate, then it is clear that the MSP announced for the 11 crops out of 14 is less than that, which clearly means that actually, MSP has been reduced for 11 crops.

"Modi government, instead of doubling farmers' income, is working to reduce their income," he alleged.

Another organisation from the SKM, the Rakesh Tikait-led Bhartiya Kisan Union (BKU) has also termed this as a fraud with farmers. "A mere Rs 100 hike for paddy is a joke. Oilseed farmers are frustrated. BKU has been demanding from day one that the MSP guarantee law based on C2+50 formula should be in place. Till then, the farmer would remain in distress," he said in a tweet.