Parliamentary Standing Committee recommendations on MSP

A Parliamentary Committee on Agriculture, Animal Husbandry, and Food Processing presented its first report on the demands for grants for the Ministry of Agriculture and Farmers Welfare for the fiscal year 2024-25. The report, chaired by Charanjit Singh Channi (former Chief Minister of Punjab), contains several key recommendations aimed at improving farmers’ welfare and addressing issues in the agricultural sector.

Key Recommendations from the Report:

• Legal Guarantee for Minimum Support Price (MSP): The committee has recommended that the government introduce a legal guarantee for MSP. This means farmers will be assured of a minimum price for their produce, which will reduce market volatility, prevent farmer suicides, and ensure a stable income. It would also promote food security and encourage farmers to invest in farming, thereby boosting rural economic growth.
  • The committee has stressed the need to declare a roadmap for implementing this legal guarantee, and regularly inform Parliament about the number of farmers selling produce at MSP.
• Compensation for Paddy Waste Management: To address the environmental issue of burning paddy stubble (parali), the committee recommends that farmers should be compensated for disposing of crop residue
  • The Punjab government has proposed a compensation of Rs 2,000 per acre, with the central government covering half of this amount.
• Increase in PM-KISAN Support: The committee has suggested that the PM-KISAN scheme should be enhanced by doubling the monetary support from Rs 6,000 per year to Rs 12,000 per year.
  • The committee also recommends extending seasonal incentives to tenant farmers and farm labourers.
• Debt Waiver for Farmers:
  • To address the growing farmer distress and rural indebtedness, the committee recommends a debt waiver scheme for farmers and farm labourers.
  • Loan dependency among rural families has risen sharply, with more families borrowing money to cover rising expenses. This has contributed to a rise in farmer suicides due to financial stress.
• Increase in Budget Allocation for Agriculture: The committee pointed out that despite absolute increases in budget allocation for agriculture, its share as a percentage of the total central plan has been decreasing. It recommended that the central government increase its budget allocation to boost agricultural growth.
  • The growth rate of agriculture has slowed down significantly, falling to 4% in 2023-24, the lowest in seven years, down from the average of 4.18% over the past four years.
• Compulsory Crop Insurance for Small Farmers: The committee recommended implementing compulsory crop insurance for small farmers, especially those with land holdings of up to 2 acres, similar to the PM-JAY health insurance scheme.
• National Commission for Minimum Living Wages for Farm Labourers: A new National Commission should be set up to ensure minimum living wages for farm labourers and address their long-pending rights.
• Renaming the Department of Agriculture: The committee suggested renaming the Department of Agriculture and Farmers Welfare to the Department of Agriculture, Farmers, and Farm Labourers Welfare to reflect a broader focus on the welfare of farm labourers.

Significance:

• These recommendations come in the context of farmers' protests in Punjab and Haryana, where farmers have been demanding a legal guarantee for MSP.
• The committee’s recommendations aim to reduce the financial burden on farmers, ensure stable incomes, and improve the agricultural sector's performance.
• The report also emphasizes environmental protection and addressing farmer suicides due to rising debts and financial stress.