Punjab chief minister Amarinder Singh has written to Prime Minister Narendra Modi to seek an increase in the minimum support price (MSP) of paddy much higher than the amount approved by the Centre on Wednesday — a demand that experts said could exacerbate the problems surrounding India’s cropping patterns.
The Centre on Wednesday announced new MSPs for the summer-sown or kharif crops. In line with a policy to promote more planting of scarce commodities such as oilseeds and pulses, the new MSP rates are relatively higher for non-cereals, such as lentils, soya, groundnut and mustard.
MSPs are federally fixed floor prices for crops aimed at avoiding distress sale by farmers and signalling a benchmark rate for private traders. A larger hike in MSP for paddy will give growers more margins for the main summer staple. But it also could further skew cropping patterns, marked by a glut of grains and scarce output of other essential items.
On Thursday, Singh called the latest increase in MSP an “insult to farmers”, and, in his letter, Singh also cited rising labour costs due to the Covid-19 pandemic.
The Punjab CM has sought an MSP of ₹2,902 a quintal for paddy, nearly 49% more than what the Centre settled at: ₹1,940. He has also urged ₹100 per quintal more to paddy-growers to cover labour costs to clear stubble, which are leftovers of paddy harvests. Farmers find it cheaper to burn the stubble, causing deadly annual spells of pollution.
Farmers, many of them from Punjab, who are protesting against three contentious agricultural laws, backed the chief minister’s demand. “The MSP hike was nothing,” said Manjit Singh of the Bharatiya Kisan Union Doaba, a farm union.
Experts, however, warned of the pitfalls of further raising the MSP for paddy.
“If one breaks down the paddy MSP offered by the Centre, you get two parts in it. One, MSP includes the basic cost of cultivation. Two, it also includes 50% returns over that cost,” said S Mahendra Dev, a former chief of the Commission for Agricultural Costs and Prices, the federal body under the farm ministry that fixes MSPs. “We don’t want to be swimming in rice and paying dearly for pulses.”
Farm economist KS Mani said the government’s “directional change” towards higher MSPs for non-cereals was in line with a widely accepted view that “cropping patterns must change”. He said there was “fair legitimacy to the demand for a federal subsidy to stop stubble burning”.
The trend to set higher MSPs for non-cereals to nudge farmers away from overproducing cereals started during the previous United Progressive Alliance (UPA) regime.
“We had increased the MSP for pulses by 40%, which led to their production going from something like 14 million to 18 million tonne in 2009 during the UPA second term,” Mahendra Dev said.
Some economists say Punjab should not be growing paddy at all because of its serious water crisis. Punjab takes about 5,500 litres of water to grow one kilogram of rice, five times as much as China does. This has plunged its water table to nearly non-replenishable levels.
There’s no better account of Punjab’s giant strides in agriculture than Ramesh Chand’s. The farm-policy head at state-run think tank Niti Aayog, Chand is from the state. “When we were young, nobody grew rice in Punjab,” he told HT on the sidelines of a seminar two years ago.
Now, the state is the third-largest producer state of paddy, the biggest exporter and largest contributor to state-held stocks.
Punjab’s rich landscape of corn, barley, gram, lentils and coarser cereals began disappearing fairly rapidly, within a decade of big cereals entering the state in the late 1960s.
Research shows rice has not only been environmentally devastating, it has also put limits on the income potential of farmers, flattening the state’s farm-growth curve. Average farm growth has plateaued around 2%, while it could have been clocking 5% annually if only farmers had not given up on cultivating non-cereals, according to a paper by economists Ashok Gulati and Siraj Hussain of the think tank ICRIER.