Explained: Why government is reluctant to commit MSP

Thousands of farmers, particularly from Punjab and Haryana, have gheraoed Delhi for the last one week. They are holding sit-ins at borders to press the Centre to fulfill their demand of making the Minimum Support Price (MSP) a legal provision in the new farm laws. There have been two arguments about the laws – while the government is claiming that it will benefit the farmers in monetary terms by removing the middlemen, the farmers have a contrary view. Punjab and Haryana farmers are opposing the laws, terming them against their interest as it will dismantle the MSP structure and thus putting the community at risk. Besides, they believe that the laws will give power to corporates over their lands. Farmer unions are also quoting Bihar’s example where the Agricultural Produce Market Committee (APMC) system was done away with in 2006 to allow the farmers to sell produces outside designated mandis in the state. There have been different arguments whether this benefited the farmers of one of the country's poorest and most backward states. Going by the data, this experiment didn't transform the lives of the farmers but ensured better prices. The state also failed to attract private investment even after 15 years of the abolition of APMC mandis, thanks to the poor governance model which is in place for the last nearly four decades. So, it is an important lesson and unfair for the farmer unions and others to compare Bihar's scenario with that of Punjab and Haryana. The new Central laws also seek to provide for trading areas outside the mandis and this has been a source of anger among Punjab and Haryana farmers. The basic argument put forth by the government is that mandis of an Agricultural Produce Marketing Committee impose charges which ultimately reduce the price realization of farmers. The government wants to check this commission which is charged by intermediaries. But the farmers are not ready to buy the government’s arguments.

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