The Telegraph
Since 1st March, 1999
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Farm support prices put in cold storage

New Delhi, Nov. 5: The government has been stopped in its tracks from announcing minimum support prices (MSPs) for rabi (or winter) crops ahead of the elections in the five states of Delhi, Uttar Pradesh, Uttaranchal, Chhattisgarh and Rajasthan.

“The MSP proposal is ready. We wanted to announce it but the Election Commission stopped us from doing so. We wanted to declare it before the sowing season to help farmers decide on their crop pattern,” Union minister of agriculture Rajnath Singh said.

The Election Commission feels that the announcement of MSP — an eagerly awaited announcement by the farming community — would amount to a violation of the code of conduct.

The MSPs for rabi crops are based on the recommendations of the Commission on Agricultural Costs and Prices. In the case of wheat, a minimum support price of Rs 630 per quintal has been suggested.

The agriculture ministry has already forwarded the minimum-support-price proposal to the cabinet committee on economic affairs (CCEA).

Farm product pricing has always been used as a strong political instrument to harvest votes during elections. It has often led to sharp rows between the Centre and states led by different political parties or alliances.

The latest brouhaha has been over sugar cane pricing: the Centre came up with a Rs 678 crore cane package but it was rejected out of hand by Uttar Pradesh, Punjab and Uttaranchal — all of them led by political rivals of the BJP-led alliance at the Centre.

Singh used the platform afforded by a workshop on agriculture hosted by the Federation of Indian Chambers of Commerce and Industry (Ficci) to bash the Uttar Pradesh government for stonewalling the cane package.

Singh said the package was designed to help clear the dues of sugarcane farmers who are owed massive sums by sugar mills who buy the produce on credit.

He said the problem arose because “fixing cane prices and paying it to farmers is not the responsibility of the Centre”. “The Uttar Pradesh government itself can, and rather should, fix the prices,” he added.

He said after their rejection of the Centre's cane package, the onus of clearing the dues of the poor sugarcane farmers for 2002-03 now rested squarely with the state governments of Uttar Pradesh, Uttaranchal and Punjab.

Singh, however, said nothing stopped the Uttar Pradesh government from fixing an “agreed price” higher than the Centre's MSP in consultation with sugarcane growers’ societies and private mills in the state.

Meanwhile, director-general of the International Food Policy Research Institute Joachim von Braun said here today that the failure of the world trade talks in Cancun would hurt farmers in developing countries by limiting their opportunity to start producing more remunerative crops.

The Cancun talks had collapsed on the issue of high subsidies that the European Union and the US were paying their farmers — for instance cotton — that were hurting farmers in Asia, Africa and South America.

“Diversification of crops should not be done randomly but be based on competitive advantage,” said Von Braun.

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