The one demand that farmer unions put forth every time they protest is the implementation of the Swaminathan Committee report. But what is this report and why do farmers want it so badly?
The National Commission on Farmers — headed by agricultural scientist MS Swaminathan — was constituted in October 2004, to look into the cause of farmer distress and suggest a holistic solution. A key recommendation of the committee, which submitted its final report in October 2006, was that minimum support price (MSP) for all crops be fixed at a premium of 50 per cent over the cost of production.
While the NDA promised to implement this in its election manifesto in 2014, it is yet to take action four years down the line. However, farmers have had their fingers crossed ever since Finance Minister Arun Jaitley announced that all crops will have a MSP of 50 per cent plus cost of production, starting from the 2018-19 kharif season, during this year’s Budget. Will the Centre meet the demand of anxious farmers?
What are the other recommendations of the report?
MSP hike – not a big cheer
According to the proposed changes, the ‘cost’ considered for the new MSP will not be as per the Swaminathan Committee report. The report had recommended a MSP of 50 per cent profits above the cost of production (classified as ‘C2’ by the Commission for Agricultural Costs and Prices), which is comprehensive cost, or the sum of all costs incurred by a farmer plus rentals on owned land and interest on owned capital. But the cost the government will take into account is A2+FL (actual paid out cost plus imputed value of family labour), which is expenses on farm inputs — including seeds, fertilisers, fuel and irrigation — and imputed value of family labour.
So, will there be any relief? There are crops where the support price just about covers the cost. The MSP of such crops — including jowar, ragi, sunflower seed, sesamum, niger seed and cotton — is likely to go up sharply. However, the increase will be ineffective on crops where the market prices are already higher than the MSP.
Key suggestions ignored
The Swaminathan Committee report had several suggestions to reduce agrarian distress. But, today, even farmer groups have forgotten them. The Committee suggested land reform measures, including distribution of ceiling surplus land and waste lands; prevention of diversion of prime agricultural land and forest land to the corporate sector for non-agricultural purposes; and setting up a mechanism to regulate the sale of agricultural land based on quantum of land, nature of proposed use and category of buyer.
To achieve higher growth in productivity in agriculture, it recommended an increase in public investment in agriculture-related infrastructure, particularly in irrigation, drainage, land development, water conservation, research & development and road connectivity. It also suggested a reduction in the rate of interest for crop loans, and offers a moratorium on debt recovery,and waiver of interest on loans in distress hotspots and during calamities, till capability is restored. Drought prone areas should have a four-five year repayment cycle for crop loans, it said. The committee also recommended establishing an Agriculture Risk Fund to offer respite to farmers in regions hit by natural calamities and issuing Kisan Credit Cards to women farmers, with joint pattas as collateral.
To reduce farmer suicides, the committee highlighted the need to set up State-level Farmers’ Commissions with farmer representation, to ensure quick response to farmers’ problems and restructuring of micro-finance policies. It also said that all crops should be covered by crop insurance, with the village and not block as the unit for assessment.
The Committee indicated the need for providing for a social security net for farmers and landless agricultural workers under a comprehensive National Social Security Scheme. Such a scheme would take care of expenses, up to a ceiling, for hospitalisation in case of illness of a family member, maternity leave, life insurance and pension.
This report shows that an efficient and sustainable solution for agrarian distress lies in revamping the entire system. Farmer organisations should, hence, demand for implementation of all these recommendations.