Peasants across the country have come out on the streets again and again in recent years demanding secure livelihood. They have been demanding, amongst other things, that the government guarantee that their produce will be procured at 1.5 times the cost of production and establish mechanisms to ensure this.
Instead of meeting this demand, the government has been announcing schemes in the interests of capitalists controlling agricultural trade and against the peasantry. The government announced a new scheme - the PM Annadata Aay Sanrakshan Abhiyan (PM-AASHA) on 12th September. The government claims that through this scheme, the peasants will be guaranteed procurement of their produce at remunerative prices.
The “umbrella scheme” has three parts to it.
The first is the Price Support Scheme (PSS) under which the Central government, along with state governments, will procure pulses, oilseeds and copra.
Earlier, on July 4, the Central Government had announced that it was increasing the minimum support price (MSP) of 14 kharif crops. The MSP announced by the Central government in July is much lower than 1.5 times the cost of production, which has been the demand of the peasantry. It is much lower than even the MSP announced by state governments for the same crops.
Every crop season, the government declares MSP for some crops. However, with the exceptions of wheat and paddy – that too, only 20% of wheat and rice is publicly procured in only 4 states — there is no commitment to procure other crops. In most cases, the peasant is forced to sell his crop in the open mandis at prices much lower than the MSP. There is no mechanism that will ensure that produce is procured at the MSP. The procurement has been left to the states, and the mechanism varies from state to state, with many states having next to no procurement. This leaves the farmers at the mercy of traders.
Peasants must not be fooled by the announcement of the government that it will procure pulses, oilseeds and copra at a remunerative price, or even the government declared MSP. The government has no mechanism to ensure this procurement is actually organized at the mandis. The aim of this announcement is to divide the fighting peasantry, and divert them from the common struggle to ensure that the state fulfil its responsibility of procuring all agricultural produce, in all states at 1.5 times the cost of production.
The second scheme announced on September 12th is the Price Deficiency Payment Scheme (PDPS). Under this scheme, farmers are supposed to be paid into their bank accounts, the difference between the price at which they sold their produce in the market and the MSP.
The PDPS is nothing other than the ‘Bhavantar Bhugtan Yojana” (BBY) scheme of Madhya Pradesh which has failed the peasants badly. The new scheme is an attempt to use the failed ‘bhavantar’ scheme on the rest of the country. The (BBY) was launched in August 2017 to compensate farmers for the losses they would suffer by selling their crops below the minimum support price (MSP) in the state’s 257 mandis. This was to apply to seven crops including urad, groundnut and soyabean. Twenty-one lakh farmers signed up for the scheme during the first sales window between October and December.
But when farmers took their produce to the market, they discovered that the government was compensating them not on the basis of the actual price at which they sold their produce, but an average sales price fixed for the whole state (called the modal price, which took into account prices prevailing in the market for the specific crop in major producer states). If a farmer sold his produce at a price above the modal price, the government paid him the difference between the actual sales price and the minimum support price. But if the produce was sold at a price below the modal price, the government paid him only the difference between the modal price and the minimum support price. In such cases, there was no provision for covering the losses from the gap between the actual sales price and the modal price. In many places, this gap was huge.
There are numerous cases of farmers selling urad, soyabean and groundnut across the state at prices much lower by at least Rs.1000/tonne than the modal price. One lakh transactions were recorded in which 470 traders had bought crops from farmers at less than 60% of the minimum support prices. In more than 29,000 of these transactions, the crops were sold at less than 30% of the minimum support price. In some mandis the same traders have bought produce from same farmers through multiple transactions at a price below the prevailing market rates and much below the minimum support price
Further, the scheme caused distress selling. If a soyabean farmer had registered under the scheme, he had to sell the produce between 16th October and 31st December. Such windows were fixed for all the kharif crops. So all the farmers had to dump their produce in the mandis at the same time. As a result, the supply surpassed demand several times over and the prices at the mandi plummeted. To make matters worse, the government imposed a cap on the quantity of produce that would be compensated for under the BBY.
While about 2 million of Madhya Pradesh’s 9.8 million farmers registered for BBY between 11th September and 25th November 2017, most of them stayed away from registering during the Rabi season, based on their bitter experience of the scheme. It is this anti farmer, pro-trader scheme that the government is promising to implement across the whole country!
The third is the Pilot of Private Procurement & Stockist Scheme (PPSS). This proposes the piloting of private sector in procurement of oilseeds. States are being given a freehand to implement this through private stockists in selected district/APMC(s). The selected private agency shall procure the commodity at MSP in the notified markets during the notified period from the registered farmers in consonance with the PPSS Guidelines, whenever the prices in the market fall below the notified MSP and whenever authorized by the state/UT government to enter the market.
The Private Procurement and Stockist Scheme is yet another effort by the government to bring in private players in agricultural procurement. It will be a further justification for the government to withdraw from its responsibility of procurement of agricultural produce.
Both the Price Deficiency Payment Scheme and the Private Procurement and Stockist Scheme are aimed at opening the door wider for big capitalist traders in agricultural produce to maximize their profits by manipulating the prices in their favour.
Peasants and their organisations across the country have dismissed the latest announcements as nothing but fraud and deception. While on the one hand the government has been announcing one scheme after another in the name of ensuring a better deal for the peasants, on the other it is opening the door of marketing of agricultural produce to capitalist monopolies dominating agricultural trade. The peasants have been left to the manipulation of input and output prices by those controlling agricultural trade. This is the cause for the loss of livelihood of lakhs of peasants across the country. The announcements of MSP or the Bhavantar Scheme, the Prime Minister’s Fasal Bima Yojana and the latest schemes are attempts to deceive the peasants. The government is lying through its teeth when it says that it is concerned about ensuring secure livelihood for the peasantry.
Security of livelihood can be guaranteed to peasants if and only if the state takes over wholesale trade in agricultural produce and puts it under social control. The state has to take responsibility for guaranteeing procurement of all crops at remunerative prices. This is the demand of the peasantry who are determined to fight for their just rights.