On 'Equitable Price Of Crops'
Every year a few days after the new harvest different types of agitation for 'equitable price' of crops are generally witnessed, mainly in places like Punjab, Haryana, some areas of western Uttar Pradesh, and also in southern Karnataka, Andhra Pradesh and Tamilnadu. These agitations are generally led by the rich peasants and they are also the main participants. In September of the last year Delhi witnessed a sit-in demonstration by the Bharatiya Kisan Union (BKU) of Punjab on the demand of Minimum Support Price (MSP) The Chief Minister of Punjab came to Delhi and took part in the demonstration. Most probably this year also will not be an exception. In the mean time wheat of the Rabi season has already started to arrive in the market. According to governmental calculation, after last year's 'unprecedented' drought the production of wheat in this year is quite good. The wheat will start to arrive in the mandis from 1st of April.
But from the last year it is being observed that these types of demonstrations are spreading in newer areas. These types of demonstrations have started to raise their heads in states other than states 'famous' for green revolution or states like Karnataka, Maharastra. Moreover, it is also seen that agitations are now often taking place in different states on the demand for the increase of the minimum support price not only of crops like paddy, wheat, cotton or sugar cane, but also of different food and commercial crops.
In other words, these types of movements on the demand of minimum support price (or 'equitable price' according to many others) of crops are nothing new. Particularly, since the seventies of the last century these types of movements had been seen to take place in the areas of 'green revolution' and in Nasik in the south and were led by rich peasants leaders like Tikait, Sarad Joshi, etc. and different regional parties like Akali Dal. It can also be observed that as a result of the unequal, limping but continuous capitalist development in the Indian agrarian sector the power and influence of the capitalist landlords and rich peasants are gradually increasing. At present their power is more than what has been in the eighties of the last century. The might of these capitalist landlords and rich peasants is becoming more and more visible in different elections. In the present thirteenth parliament 45% of the M.Ps are peasants. It can safely be assumed that more than ninety per cent of these peasant M.Ps are representatives of the rich peasants, because they are most vocal, active and powerful elements in the Indian rural scene. Few years back India got two Prime Ministers who were self-declared representatives of this section. In this way this section has become an important partner of the state power. Again, this section has always been enjoying the lion's share of different grants, reform programmes systems of the state by dint of their power-and so they have been most vocal in raising the demand for increasing grants, subsidies, etc. Not only they have raised demands, but also they have often put pressure on different central and state governments for increasing such gratuitous reforms, have mobilised and are still mobilising agitation-movements
But in recent times it is seen that not only different all- India and regional parliamentary parties or the above-mentioned powerful group of capitalist landlords and rich peasants, but also many of the existing communist revolutionary organizations are raising the demands for increasing the Minimum Support Price, continuing with or increasing of different governmental subsidies. They are calling the poor and middle peasants to build up movements on these demands. They are even asking for the active participation and support of the rich peasants. They are arguing that the poor and middle peasants (and also rich peasants) are being harmed for not receiving minimum support price for their crops, they will suffer huge financial loss if they do not got profitable price for their product, the cost of production will increase if the subsidies are withdrawn or not increased; so the communist revolutionaries should initiate programme to develop the movements of the poor and middle peasants on these demands.
Minimum Support Price and Agriculture-Subsidies - The Main Beneficiaries
The implementation of the Minimum Support Price of the crops began from the seventies of the last century. As a result of the green revolution the production of paddy and wheat started to increase from this period. This increment took place mainly in some states where the spread of capitalist mode of production in agriculture crated few powerful groups of capitalist landlords and rich peasants. These groups created pressure on the government to take steps so that the increase of production did not pull down the prices of crops. And mainly as a result of this pressure the government introduced the system of fixing minimum support price for the crops. For fixing this price for every year the government calculates the total cost incurred by the peasants for the production of a particular crop. The costs of high-yielding seeds, water, electricity, fertiliser, pesticides, agricultural equipments, labour, etc. make up this total cost of production. Hence it is clear that the objective of fixing MSP is to enable the peasants to get profitable price for their crops every year, in spite of the rise in the price of the necessary inputs. It must be remembered in this context that this is not the only step taken by the government with the above-mentioned objective. The government generally takes a number of measures aimed in this direction, as for example, the series of agriculture subsidies provided by the government. The government supplies electricity to the peasants at cheaper costs, sometimes at no cost and provides subsidies for water, fertiliser, seeds, etc.
Along with the fixing of minimum support price for crops the government also decided to buy, every year, a fixed amount of crop from the peasants. Since the government provides subsidies to the peasants every year, so a system of compelling the peasants to sell a fixed portion of their crop to the government every year is put into force right from the beginning. The peasants are allowed to sell rest of their crop in the open market. It has been grossly assumed that the open market selling price will always be higher than the MSP. In other words, through the system of buying, every year, a fixed amount of crop at fixed price the government is making it certain that the open market price will always be higher than the MSP.
But whether the peasants will actually gain from these measures of the government depends on some more factors. There is no fixed arrangement for ascertaining how much the government will buy from which state. The numbers and arrangements of the mandis or markets or collection centers from where the government collects crops from the peasants are inadequate. In some of the states these mandis or collection centers are very near to the cultivation lands while in some other states these are far away. Although there has been going a process of capitalist development in the agriculture sector for the past few decades, this development has been extremely unequal and limping. Consequently the development of the market has been just the same. The rate of development of other infrastructures like roads, godowns, etc. is also extremely slow and inadequate. But for being able to sell their surplus crops the peasants require adequate development of the market and the modern arrangements like construction of roads and godowns, maintenance systems, etc. Naturally, the amount of advantage that the peasants with surplus crops can take depends on the degree of development of these facilities. Not only this, the crops that cannot be stored for long and have to be sold in the market quickly require adequate maintenance arrangements. If the government fails to provide for these facilities then the peasants must have the ability to built proper maintenance arrangements. Such developments have taken place and such facilities exist much more in Punjab and Haryana than in other states and consequently the peasants have acquired much more strength of their own in these states. In the other hand, in Bihar and Orissa these infrastructures and market are grossly underdeveloped. Even it is seen that many of the surplus-producing peasants of comparatively developed west Uttar Pradesh and Uttaranchal cannot take advantage of these facilities. It has been observed that because of the non-availability of their proper access to these facilities and/or their inability to make proper arrangements of their own for storing their crops these peasants are forced to sell their crops to the local middlemen In a report of 2001 The Times of India (16.11.2001) reported that:. ?Although the peasants of Uttar Pradesh and Uttaranchal produced 25 million tons of wheat in the Rabi season the government department had collected only 2.4 million tons from them. The majority of the peasants could not sell at the price of Rs.610.00 per quintal. Instead they were forced to sell at the rate of Rs.450.00 to Rs.550.00 per quintal to the local middlemen who made profit by selling the wheat to the government at the government- fixed rate of Rs.610.00 per quintal?. Some amount of such distress selling is also observed in Punjab and Haryana (EPW, 31.01.2004). In these states also the comparatively weaker peasants are forced to sell their surplus crops to the middlemen and traders at a price lower than the support price fixed by the government. If the peasants of Punjab, Haryana. Uttar Pradesh and Uttaranchal are forced to face this type of fate then the fates of the peasants of the underdeveloped, backward states like Bihar, Madhya Pradesh, Orissa, etc. can be assumed somewhat. Everywhere in India the middlemen and traders make profit in this way. Moreover, in many instances it can be observed that an alliance of rich peasants and traders is controlling the mandis. Consequently. This alliance plays a dominating role in the buying and selling of the grains in the mandis
The huge state wise disparity in the amount of surplus grains reaching the market can be seen from Table-1. The differences between the markets of the states like Punjab, Haryana. etc. and those of the states like Bihar, Orissa, etc., are quite note-worthy.
Table - 1: - State Wise Figures of % of Total Production Reaching the Market (1995-1996 to 1999-2000)
Source: - indiastat.com
The figure show that due to inadequate development of the market and infrastructure- or, in other words, due to the extremely unequal and limping development of capitalism in most case the peasants at large can not enjoy the benefits of the MSP fixed by the government. Only the middlemen, traders and a handful of capitalist landlords and rich peasants are mainly enjoying the benefits of it. Of course some part of it is filtering downwards and reaching the lower strata of the peasantry in droplets. But that the amount is negligible have been reported by different agro-economists.
Moreover, there is another aspect, which should be stressed upon. The amount of food grains that the governmental agency Food Corporation Of India (FCI) generally collects is only 15% of the total food grains production of the country (Indian Express, 11.01.2001). A major part of the rest of the food grain production is sold in the open market. We have already seen that by fixing the minimum support price of food grains the government tries to fix the grain price in the open market. We have also noticed that a large number of peasants cannot reach the governmental collection agency. They are forced to sell their crops to the local middlemen or traders. So it is more or les obvious that the majority of the peasants who look for profiting from their surplus produce are the comparatably powerful rich peasants and the capitalist landlords, because they are the ones who can wait for the price of the grains to increase in the open market. The potato cropping of West Bengal bears numerous examples of these phenomena. A report of CAG placed before the West Bengal State Assembly in 2003 states that the rice mills in the districts of Bardhaman, Midnapur and North 24 Parganas of West Bengal have bought paddy from the peasants at a lower rate than the minimum support price fixed by the government and have amassed profits of about 21.5 crores(Business Line. 21.07.2003).
There are also a number of loopholes and defects in the way the MSP is calculated and fixed. Every year the government- appointed Commission On Agricultural Costs And Prices (CASP) determines the minimum support price and recommend it to the government. But in fixing this minimum price the state wise and area wise variations are not at all taken into account. The wage rate of agricultural labourers differs from state to state; the land rent is also different in different states so also the prices of water and electricity; the irrigation facilities also differ widely, the bigha wise productivity differs from state to state, from area to area. The amount of land in possession of the peasants is also not equal. No difference is made between peasants owning ten bighas and those owning hundred bighas. While fixing the minimum price the government does not make any difference peasants cultivating on rented land and peasants cultivating on own land. The government never cares to consider these differences and disparities and prescribes a uniform support price of crops for all of India. The inevitable result of this is that those of the agricultural population who are reaping maximum benefit from MSP are the peasants of the comparatively developed areas, the bigger land-owning peasants, or the rich peasants and capitalist landlords who can employ developed methods of cultivation, the peasants enjoying greater irrigation facilities or greater amount of subsidies and the rich peasants and the capitalist landlords who can keep their crops stored for longer periods.
Santa Kumar, the ex-Food Minister of NDA- government informs us:- ?Punjab produces 20% of the total wheat production of the country, but the government procures from there only 58% of wheat. Similarly, Haryana produces 12%, but procurement from there is 27%. Contrarily. The government from Madhya Pradesh is 2.1% while the state produces 11.8%. Bihar produces 6% whereas the procurement is nil. Uttar Pradesh produces 33% and the procurement from this state is 9.4%?. The same picture can be seen in the case of rice. Punjab and Andhra Pradesh produce 9% and 13.3% respectively whereas the government procurements from these states are 40% and 31% respectively. On the other hand, West Bengal and Uttar Pradesh produce 15.5% and 13.55% and the procurements from these states are 2% and 8% (Business Line, 9.11.2001). However, these figures do not give the full picture. For West Bengal uses up for its own need bulk of the rice it produces-which means the amount of surplus production in this state is very small-at least, according to the statistics supplied by Santa Kumar. In spite of it, a gross understanding about the peasants who are mainly enjoying the benefits of the procurement policy of the government or from the minimum support price can be had from the figures given by the ex-minister. It can be observed that the main beneficiaries of these governmental measures are the peasants of the capitalistically developed areas where the (rich) peasants groups are comparatively much more strong, who are able to exert strong pressure on the government.
Table - 2 : - State Wise Production and Procurement (in %)
Source: Ex-Food Minister Santa Kumar, Business Line, 9.11.2001
From the above discussion it can be seen that the rich peasants and the capitalist landlords are the main beneficiaries of these facilities. We have so long discussed about wheat and rice production. But same picture will come out if the productions of other crops like sugar cane, jute, potato, tomato, etc. are discussed.
Cannot These Demands Belong To Poor & Middle Peasants Also?
Does not the non-availability of profitable price for their crops affect the whole of peasantry? If the poor and middle peasants do not get minimum support price are they not affected? Is not the sharp rise of the prices of the agricultural inputs creating great hardships in the lives of the poor and middle peasants? Many of the communist revolutionaries argue in this way and try to impress upon the necessity of developing agitations/movements on the basis of demands for profitable price of crops, minimum support price of crops, increment of subsidies, etc. They are trying to organise such types of movements and to get the participation and support of rich peasants in these movements.
Firstly, which sections of the peasantry are surplus producing and are in a position to produce the surplus for the market? Can the poor peasants produce any surplus? Can also the middle peasants produce any surplus? The latest (1991) governmental statistics tell us that 80.6% of the land holdings of the country are small and marginal holdings i.e. holdings of less than 2 hectares.12.4% of the land holdings are of sizes varying between 2 to 4 hectares (source: National Sample Survey, Round No.47). The measurement of bigha is different in different areas of India. But for the sake of convenience it can be assumed that in West Bengal 1hectare means 3 acres, 1 acre equals 2.5 bighas and 1 bigha equals 20 katthas. So 2 hectares come to round about 25 bighas of land. From these we can see that the sizes of 80.6% of the land holdings are 15 bighas or less. The sizes of further 12.4% land holdings vary between 15 to 30 bighas. Here we must keep in mind one important aspect, which the calculations of the government bureaucrats do not show and many of the communist revolutionaries do not keep in mind while carrying on discussion on the subject. Whether the lands under discussion are fertile or barren, whether these are irrigated or completely dependent on rain-god-these types of questions are completely ignored by the government while calculating the MSP. Any dependable facts about the productivity of each land are also hardly available. But it can be guessed easily that in land holdings whose size vary between 0 to 15 bighas it is not possible for the peasant families to have any surplus after meeting the requirement of their own food and keeping a saving for seeds for the next season and in most of the cases it is the reality. Moreover, another estimate shows that the average size of the land which 60% of the peasants possess is 0.39 hectare or 2.92 bighas (Devinder Sharma, www.dsharma.org/agriculture/50years.htm). This figure also tells that 60% of the peasants do not have any capacity to produce any surplus. And the former governmental estimate has shown that the peasants owning less than 15 bighas of land (or 80.4% of the total land holdings) are also not supposed to have this capacity. Even if some of these peasants are able to produce some surplus then also they are forced to sell this surplus or some portion of it to the middlemen or traders for payment of interests or for meeting some urgent demands of the family. The majority of these peasants are forced in distress selling or forced to sell to the local middlemen or traders instead of governmental agencies due to the lack of development of the market. So it can be seen that the poor peasants are not benefited in any way by the implementation of reforms like the increase of MSP, etc.
Moreover, the poor and the landless peasants have to take loans at the beginning of the harvesting season without which they cannot carry on cultivation. Due to this most of them have to spend almost their last farthing to repay loans, interests, etc and are forced to sell their crops to the middlemen, traders, cold store owners. Hence the demand for raising the minimum support price actually does not carry any real meaning to them.
Actually, only a small upper portion of the middle peasants can take advantage of the market, takes huge amount of loans and thereby invites huge amount of risk. Yet the whimsical behaviour of the (capitalist) market reduces many of them into destitute and even if someone is able to make profit the amount of profit is negligible. The opportunities opened up by the reforms like raising of MSP, granting or increasing of subsidies, etc. drips down to this section from the palms of the upper section in droplets. Hence the section is an enthusiastic supporter of the demands of the rich peasants and capitalist landlords and rallies in the agitations on the demands for minimum support price, subsidies, etc.
On the other hand, the sections of the rural population who are hurt most by any increase of the prices of the grains are the poor and landless peasants and the agricultural labourers, because the wages they earn by selling their labour-power are mostly spent for buying necessary food items from the ration shops or from the market. But due to the yearly increase of the MSP the prices of the food grains are soaring every year. Consequently, the poor section of the rural population is facing increasing misery. In the period between 1972 to 1981 there had been 71% increase of the minimum support price in the case of wheat and in the case of paddy the corresponding increase had been 81% (Devinder Sharma, www.dsharma/agriculture/50years.htm); between 1981 to 1991 the increase of MSP in the increase was 84% for wheat and 955 for paddy; between 1991 and 2001 the corresponding figures were 193% and 158% (Source: Table-3.4.1 mentioned in the documents of the 10th Plan of the Planning Commission). In unison with the increase of the prices in the Public Distribution System the market prices are also climbing and climbing more steeply and taking the food grains beyond the reach of the tens of thousands of the rural poor who can not avail of the opportunity of the rationing system. The urban working class and the poor are also being severely hit. The total effect of these is that the vast majority of the poor are more and more being thrown out of the rationing system, although the food grains in the rationing system are comparatably cheaper than in the open market. The percentage of food grains distributed through the Public Distribution System has never been high. Now it is gradually dropping. In the eighties of the last century the average quantity of the food grains distributed through the rationing system had been 12-13% of the total available amount of food grains. In the nineties this figure had come down to 9%. One observer has reported in a daily paper that, 'Ten years back people used to buy 90% of the rice and 86% of the wheat from the rationing system. Now tese figures have come down to 48% and 32% respectively? (Ananda Bazar Patrika, 3.04.2002).
The net result of these has been that the government godowns are overflowing with the amount of food grains need to be stored is exceeding three to four times the storage capacity of these godowns. As a result the food grains are rotting in the government godowns and the government is exporting food grains at BPL price. It is also suggesting to throw food grains into the sea. The governmental agency CACP has recently shown and even the Planning Commission has lamented (in the documents of the 10th Plan) that due to the increase of the minimum support price, procurement price, etc. the prices of food grains are increasing continuously and the poor without buying power has no ability to buy food grains at such exorbitant price, the ration shops are selling less and so the godowns are overflowing. On the other hand, the army of the starving millions is increasing, and also death due to starvation or malnutrition, as per the vocabulary.of the government. So the vast majority of the rural population-the agriculture labourers, the poor, small and the middle peasants are facing increasing misery due to the continuous increase of the minimum support price. The MSP and its increase is benefiting only the minority of the rural population ?the rich peasants, the capitalist landlords, the middlemen and the traders. So this demand is their demand and not the demand of the poor peasants and agriculture labourers who constitute the overwhelming majority of the rural population.
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