Saturday, May 25, 2019
Follow us on

Saving Farmers Assured MSP fails to wean away farmers from paddy-wheat cycle Annual Rise Keeps Them Plugged In

February 23, 2019 06:15 AM


Saving Farmers
Assured MSP fails to wean away farmers from paddy-wheat cycle
Annual Rise Keeps Them Plugged In


Despite agriculture experts and Punjab government stressing on the need for diversification of the crops to break the wheat-paddy cycle for the past many years now, there has been little headway in convincing the farmers because of the assured Minimum Support Price (MSP) on the two crops. To make them even more dependent on the wheat-paddy cycle is the acceptance of demand for increase in MSP by the Centre almost every year.

Raising the issue of muchneeded diversification of crops in the state, former power and irrigation minister Rana Gurjeet Singh on Friday said in the Punjab legislative assembly that the maize grown during the monsoon season, potato and beetroot (chukandar) could be the best substitutes to the wheat and water-guzzling paddy crops.

The minimum support price (MSP) for wheat and paddy has always been a political issue in Punjab.

The Centre fixes MSP for 25 crops every year but the Punjab government has only undertaken procurement exercise of

wheat and paddy on behalf of the Food Corporation of India for distribution through public distribution process(PDS).

Though the state machinery thinks that Maize could be an alternative to motivate farmers to come out of the wheatpaddy cycle and to implement diversification, but the state government is reluctant to undertake Maize’s procurement despite the central government fixing its MSP. It reasons that Maize cannot be used for supply in the PDS.

Since 2009-10, MSP of wheat has increased from Rs 1,080 per quintal to Rs 1,735 per quintal in 2018-19. In case of paddy, it was Rs 1,030 per quintal in 2009-10 and has gone up to Rs 1,770 per quintal in this fiscal. The Union government in October 2018 had increased the MSP on wheat by 6% to Rs 1,840.

Experts point out that the Centre calculates MSP after considering all the aspects, including the farm input cost, but farming is not now a viable option for at least marginal farmers having land less than 2.5 hectares. Sher Singh Sangwan, retired professor (SBI chair) at the Centre for Research in Rural and Industrial Development (CRIID) at Chandigarh, says though the Centre fixes the MSP for over 20 crops implementation is tough.

“We cannot compare the per year increase of MSP with the recommendations of the Swaminathan Commission report since the commission did not specify the cost of production,” he said.

In order to ensure fair price to the farmer and save him from distress sale of agriculture produce, Sangwan suggests regulating the production of various crops on the basis of domestic and export demand like developed countries USA, UK and Australia.

On the basis of various expert suggestions and his own experience in the field, Kahan Singh Pannu, secretary of the state agriculture department, has compiled one such list.

Zero GST on farm machines

The Goods and Services Tax (GST) council has levied 12% - 18% GST on the agriculture machinery and it various components in 2018. This has not only resulted in the machinery becoming costlier but also increase in the agriculture input cost. The GST on the PTO shaft as well as the gear boxes used in agriculture machinery has been levied at the rate of 28%. Pannu is of the opinion that this GST should atleast be reduced to 4%.

Ethanol from maize

Punjab government has a proposal to diversify around one million hectare of paddy out of a total of three million hectare to alternative crops, mainly maize. This has been planned after taking note of the fact that groundwater being used for cultivation of paddy is going down every year. As many as 110 blocks out of a total of 135 have already gone into dark zone and 45 blocks out of these have become critical.

The Union government had in June 2018 allowed the conversion of Maize into bio-ethanol for blending it with petroleum products. Ethanol to the tune of 20% can be blended with petrol and upto 5% with the diesel.

Pannu feels that the national policy on biofuel-2018 requires amendment to allow conversion of corn or maize as a source independent of other food grains otherwise it could lead to issues with regard to maize cultivation.

“It is required to de-link corn from other food grains for the production of bio-ethanol,” he said.

Have something to say? Post your comment