To put the clock back and destroy that self-sufficiency (even though it is self-sufficiency at a low level of purchasing power of the people) is what the Modi government’s farm laws are forcing on the country. Imperialism has been wanting this for a very long time, and the Modi government is spineless enough to give in. The farmers’ agitation is a stand against this giving in. To accede to the introduction of corporate agriculture and to bargain only on how much should be the share of the farmers and how much of the corporates, is to miss this point altogether. It amounts to selling whatever remains of the country’s sovereignty to imperialism. And this is in addition to the fact that such an approach would roll back the public distribution system (since it cannot be sustained through imports whose volume each year would be uncertain). The second misconception relates to the belief that a country-wide MSP-cum-procurement regime is unnecessary in India. It is argued that the procurement that the Food Corporation of India undertakes just from the three surplus regions, Punjab, Haryana and Western Uttar Pradesh, is quite enough to feed the public distribution system in the country as a whole; hence a country-wide MSP-cum-procurement regime can only swell the stocks with the government, raising the cost of storage, and of interest payments on the credit advanced by banks for procurement, both of which involve a drain on the budget.Casting the procurement net wider than the three surplus regions therefore entails, in this view, a double waste: a waste of grains in government godowns, and a waste of budgetary resources tied up with their purchase and storage; it is best therefore to keep the ambit of support and procurement operations limited.This argument too is wrong and betrays a lack of knowledge about Indian agriculture. The FCI does not procure much from other states anyway, and a rise in MSP does not raise this amount much. The MSP is a floor-price and a rise in this floor-price raises even the price on open-market sales.Hence, what a rise in MSP does is to raise farmers’ incomes by raising the actual price they get on their non-FCI sales. And it does this not because of an increase in government procurement but even without such an increase.But then, how can the open-market price rise without a fall in open-market demand, which would then necessarily mean larger procurement by the FCI? The answer to this puzzle lies in the fact that the demand for foodgrains by higher income groups, that is, those outside the ambit of the PDS, is generally price-inelastic, which means that this demand does not shrink much even when the foodgrain price rises in the open market.Hence the question of there being unsold produce that devolves on the FCI (which therefore has to hold extra stocks), because of the parallel rise in the open market price following a rise in MSP, simply does not arise. A country-wide MSP regime thus gives the farmers everywhere an assured income without having much effect on government stocks; and a rise in MSP raises this assured income without increasing government stocks much.Of course, the FCI is lackadaisical about operating in states other than the three surplus states, and some state governments have had to step in with their own agencies to make up for the FCI’s absence. Whenever such agencies have operated, they have not mobilised much by way of procurement, but have given the farmers an assured income.It is important, therefore, that the FCI’s operations, far from being truncated from an all-India level, should on the contrary be made pervasive and have an all-India coverage. This means that both the propositions, first, that corporate encroachment only affects the peasants’ share and hence is a bilateral issue between the farmers and the corporates, and, second, that an effective MSP for the country as a whole, and appropriate increases in it according to circumstances, are “unaffordable” for the government, are invalid.Such propositions, however, can weaken the farmers’ agitation; they must not be allowed to do so.(IPA Service)Views are personal
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