Farm protests 2.0 and MSP conundrum: Noted economist suggests ‘workable solutions’

New Delhi, Feb 19 (IANS) Amidst the Farmers protest 2.0 over demands of Minimum Support Price (MSP) for all crops, Ashwini Mahajan, nation's leading economist has suggested ‘workable solutions’ for putting an end to the impasse, without hurting the interests of either farmers or government.

 

Ashwini Mahajan, Economics professor in Delhi University and Swadeshi Jagran Manch co-convenor opines that, “If Centre provides guarantee cover on all crops, it would prove detrimental for the overall economy.”

Mahajan said that MSP has been operational in the country since 1966 and crops like Paddy have been procured at ‘highest MSP’ for long.

He said that MSP prices for other crops have also increased over the years, some of them have seen 100 per cent hike in past decade.

“Guarantee for MSP or legal protection for it could impose financial burden on state government as well as Centre. This will impair the existing fund allocation for various government developmental programs including education, health, infrastructure and others,” he explained.

Contending against MSP guarantee for crops, he said that government’s fund generation is limited. If a law is made for MSP guarantee, it will bind government’s hands in fund allocation to other sectors and it will find itself in quandary, in case of any exigency.

Currently, government buys crops from farmers, as per the fund availability and the quantum of farm produce.

The Economics Professor also put forth a solution for dealing with the MSP conundrum. He suggested a unique ‘warehouse receipt’ scheme for ensuring farmers well-being as well as government exchequer’s stability.

“Farmers must not be forced to sell farm produce at below-market price. If farmers store their produce in warehouse or godown, a warehouse receipt could be issued. Government could turn to be a facilitator in selling the produce at certain market prices,” he said. 

“Hedge funds, insurance firms could also be roped in for the purpose. A trust could also be formed to implement this,” he further suggested.

Citing example of cotton purchase, he said the crop has enjoyed a sort of guarantee, a similar arrangement could be introduced for other crops using warehouses, insurance schemes.

Speaking about the revocation of farm laws after farmers protest 1.0, he said, “had the three agricultural laws were introduced and corporates brought into system for fetching market price, there would have been more likelihood of their exploitation than their upliftment.”

The need of the hour is, he said, to find out a mechanism to help improve the lives of farmers and also fulfill requirements of nation in terms of agricultural produce.

“Warehouse receipts could turn to be effective measure in safeguarding farmers welfare as well as ensuring MSP for crops,” he said.

“Currently, lot of money goes into buying the farm produce. Breaking away from conventional modes of procurement and devising new methods of engagement could be the solution,” he added.

Sharing his views on the Farmers protest 2.0, he said that politics can’t be entirely ruled out from these protests and it may be politically motivated, as it has come just ahead of Lok Sabha elections.

--IANS

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