The Hindu : Farmers demand hike in MSP for paddy

Online edition of India's National Newspaper
Sunday, Feb 16, 2003

Southern States

Southern States - Kerala

Farmers demand hike in MSP for paddy

By Our Staff Reporter

PALAKKAD FEB. 15. The National Farmers Protection Committee (NFPC) has urged the State Government to hike the Minimum Support Price (MSP) for paddy to the old level of Rs. 8 per kg. for Matta and Rs. 7.50 per kg. for white as against Rs. 7 and Rs. 7.50 fixed respectively for the current harvest season.

In a letter to the Secretary, Agriculture, Government of Kerala, the NFPC said that the MSP fixed by a committee headed by the District Collector here was lower for the second crop compared to the first crop. It said the price was "arbitrary and without logic and needs to be reviewed''.

The letter said the MSP, as the term indicates, was a mechanism to protect the farmers against a price crash in the market. The basic idea was to ensure that the farmer received a reasonable assured minimum income for his effort. Hence, the very decision of the Government to fix up the procurement price on the basis of the market price was a contradiction in terms. Further, market price as it is, does not reflect the demand supply conditions in the market. This is because the so-called market price was fixed by a cartel of large millers. In paddy, since buyers were very few and sellers too many, the buyers can form the cartel and dictate the price. It is this price that the committee headed by the Collector sanctified by giving the Government approval. In fact, the committee itself was redundant because market price was not something which anybody could fix, the NFPC said.

The letter demanded that the Government reverse the MSP to the old level. It wanted the committee for fixing the MSP to be set up at the State level. The committee should consist of representatives of farmers apart from experts. The committee should also conduct a scientific study of the cost of structure of Kerala Rice Farms and evolve norms to fix a fair and rational MSP on a year-to-year basis.

The letter said that in a drought year like this, the Government should find provisions under the `Green Box' `Blue Box' clauses to compensate the farmers to the extent of the crop loss they had suffered.

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