Increase In Minimum Support Price Of Crop - Who Is The Gainer? Who Is The Loser?
At last the central government led by Narendra Modi has announced increase in minimum support price of some crops. At the same time the Modi government and BJP have claimedthat they are the only well-wisher of the peasants, a decision like this in favour of the peasants is the first of its kind, and the peasants will be benefitted hugely by this decision. Though it will be seen, if scrutinized thoroughly, that the increase in the minimum support price made by the government has been much less compared to what the peasants' organizations have been demanding. The peasants' organizations were demanding that the minimum support price should be determined maintaining a profit of 50 per cent on the cost of production of each agricultural produce. Swaminathan Commission had also made the same recommendations. According to this, cost of production means total production cost, which includes lease money for the land, interest on bank loan, imputed value of family labour, interest on value of capital assets, expenditure for irrigation, cost of transportation of crops etc. over and above the direct cost of production. The minimum support price should be announced maintaining a profit of 50 per cent on this total production cost - this was the demand of the peasants' organizations. But, the minimum support price announced by the government is much lower than that. For example, going by the calculation of the peasants' organizations, the minimum support price for paddy should have been '2340 per quintal, whereas the government declared MSP for the same has been '1750 per quintal. Even though the demands of the peasants' organizations have not been accepted, the disgruntlement of the peasants has subsided to a degree after this announcement of the minimum support price. Probably because the peasants are thinking that they will be somewhat benefitted even by this announcement.
Will All The Peasants Be Really Benefitted By This?
This question should be analyzed thoroughly. In the consideration of the government, a peasant is a person who owns land and is involved in cultivation of that land in some way or other. As a result, the owner of 10 hectares of land is also a peasant. Although it is not possible for a single person or a family to cultivate a land of such a huge area. What they do is they cultivate by sharing out or leasing out the land to others or employ labourers to cultivate while supervising it. But, peasant actually means a person who cultivates with his own labour or of his family. It is obvious that the owners of such big tracts of land do not have any characteristics of a peasant, irrespective of the way they cultivate the land. Even then they are considered as peasants. There is another kind of landowner, who do not possess such a huge plot of land but still own land of a considerable area. Also sometimes they are not the owners of land themselves but take land for share-cropping or in lease and employ the labour of his own or his family, though they depend mostly on the labourers hired for cultivation. They are included in the rich peasant category. But this difference between the non-peasant agricultural landowners and rich peasants is not taken into account by the government. Besides this, there are middle peasants whose land area is less and it can be cultivated solely by the labour of his own or his family. They employ very few labourers only when there is a pressing need. The poor peasants are compelled to work as agricultural labourers as they cannot subsist with the very small amount of land that they possess. Now the question is which category of peasants can avail the benefit of the MSP?
The poor peasants cannot provide for even subsistence for his family throughout the year with the proceeds of his crops that remains with him after payment of the loans taken to meet the cost of cultivation. But still they are compelled to sell a part of his crop to meet the expenditure necessary for repayment of loans or the subsistence of his family. The middle peasants also utilize their crops mainly for the provisions for their families and they hardly sell their crops. Whenever they sell their crops, they are compelled to do so to the usurers or traders or stockists' agent. This is so because the poor and the middle peasants are tied to the usurers and the traders or the stockists'agents on account of the loans taken from them. Hardly the poor and the middle peasants have any right to sell their crops independently going out of the clutches of these lenders. Obviously, the peasants get much lower price for the crops they sell to these traders or hoarders compared to the then market price. One has to go to the agricultural markets or mandis to sell the crops at the government declared minimum support price which again entails transport cost. For all these reasons, the poor and the middle peasants cannot afford to go all the way to mandis to sell the meager amount of their produce. Thus most of the times the poor and the middle peasants remain deprived of the opportunity to sell crops at the government declared minimum support price. Of course it is true that the poor get the opportunity to obtain some extra price when the traders or hoarders are forced to raise the price of crops to some extent with the rise in the minimum support price. But the full benefit of the minimum support price goes mainly to the rich peasants and the big landowners. In our country, owners of land measuring from 1 cent (1/100th acre=.00404 hectare approx.) to 1 hectareconstitute 67% of the total landowners as per the government record. Owners of land measuring from 1 hectare to 2 hectare constitute 18% of the total landowners and land measuring from 2 hectare to 10 hectare are owned by only 0.7% of the total landowners. By this record, at the most only 20% of the landowners can avail the benefit of the government declared MSP, amongst which all are not even peasants. On the other hand 80% of the landowners do not gain anything from this announcement of MSP.
Hence the rich peasants and the big landowners only can avail the benefit of the increase in MSP announced by Modi government. This section has already gained hugely from agriculture in various ways. They are now the owners of modern large agricultural machineries which they even hire out. As a result their income will increase in rural India and for this reason, they can be supporter of Modi even. It may also be noted that among those who are hailing this announcement of Modi there are big capitalists like Mahindra & Mahindra, Kirloskar, Tata, who sell tractors, seed sowing and harvester machines. Probably they are foreseeing that those 20% rural rich will get richer with the increase in MSP and consequently the market for their agricultural machinery products will expand.
Is The Government Really Willing To Purchase The Entire Crop At Minimum Support Price?
Even if it is assumed that all the peasants will be benefitted by the support price, it will be possible only if the government purchases the entire crop at that support price. Naturally the question arises that is the government really willing to purchase the entire crop at minimum support price? The answer to this question is no. The reason is that if a large part of the total produce of food grains in our country has to be purchased by the government, then the government has to make arrangements for storing the grains. Further, proper preservation arrangements have to be made, without which there is big possibility that the crops will perish. There are certain crops like potato and onion which has to be preserved immediately after harvesting. The experience of last few years has shown that there are not enough cold storages in the country capable of preserving the entire produce of potato and onion. As a result, it is seen that there is rampant corruption with bonds required for potato storage in every state. Big potato traders and the rich peasants corner most of those bonds for storing thousands of sacks of potato. Gradually it becomes clear that that they have clinched the monopoly ownership of potato and are selling the same in the market at prices at their will. Surely this could not have happened if there were sufficient cold storages. Last year the peasants of Madhya Pradesh had to sell onions at '3 per kg. as they could not keep the onions in cold storage. There were protests of the peasants against this, death of peasants in firing - we have seen all these. What will the government do with the purchased crop when there is no facility of preservation of it? So the government just washes its hands off after announcing the MSP. The peasants will not be profited by the support price unless the government purchases the crop at that price. The small amount of crop which the government purchases, they purchase it from the rich peasants and capitalist landlords due to the reasons already mentioned above.
Owing to lack of preservation facilities, on the one hand, a part of the agricultural produce of our country is perishing every year while on the other, the poor are dying in starvation. Just think that a large part of the annual paddy and wheat production of the whole country is purchased by Food Corporation of India. But a part of their stored grains rot and perish every year. The peasants can preserve much of their paddy and wheat crop in their houses by indigenous methods. But this is not possible for crops like potato and onion. So, if they are unable to keep those crops in cold storage, then they are compelled to sell them in the market at a lower price within a few days of harvesting. This opportunity is fully utilized by the big traders, godown owners and middlemen. It is a reality of Indian agriculture that the hoarders and speculators profit hugely many times more by purchasing and storing the crops and then selling those at high prices compared to the profit earned by the actual producers who invest their labour and capital in production. A huge capital has been invested in this trade. This capital is pauperizing the actual producers by appropriating their share of profit instead of aiding in production. The traders will continue with their trade hale and hearty, prosper and the peasants will also be gainers - can these two things happen at the same time?
Ruination Of 80% For The Profit Of 20%
The other side of the story is the price of the food grains will rise due to the increase in MSP. The rural poor - agricultural labourers and poor peasants have to buy most of their required grains from the market. It is more obvious for all the urban people. The urban buyers include industrial workers, daily labours, rickshaw pullers and other toiling sections, small retailers, etc. whose purchase power is much less. Hence, escalation of the price of food grains and other agricultural products will heighten the burden of price rise on them. Thus, the rich peasants and the big landowners will benefit from the increase in minimum support price while on the other hand, workers, poor peasants, agricultural labourers and other toiling people with low income will suffer losses. In gist, 80% of the people will suffer for the gain of 20% people.
Where Lies The Real Problem Of Agriculture?
There is no doubt that agriculture in our country is not fetching profit most of the times. This is becoming evident when the crops are being destroyed due to natural calamity like drought or flood or due to attacks of pests. The peasants are not earning profit even in situations of excess production as the price falls in those times to such an extent that the peasants are incurring losses instead of making profit by selling their crops. The peasants demanded an increase in MSP to solve this problem so that they can sell their crops at a profitable rate. It has been discussed that though the rich peasants and the big landowners will gain from the increase in MSP, majority of the peasants will not be benefitted by this as the poor and the middle peasants cannot take the opportunity of rise in selling price. The government does not purchase the entire crop. It is not possible in this system. So the opportunity of minimal quantity of crop which the government buys can be availed by the rich peasants and the big landowners only. Hence the increase in MSP cannot solve the problem of majority of the poor peasants. On the contrary, the burden of price rise becomes heavier for them and for other poor people. Thus consequently the main problem of agriculture becoming unprofitable is not being solved through this at all.
Where lies the main problem? It is observed that though the peasants are compelled to sell their crops at a very low rate, the price of the crops in the open market remains high. As it has been seen recently in the case of the price of onions. The peasants of Madhya Pradesh were compelled to sell onions at '3 per kg. But onions were sold at a rate of '20-25 per kg. in the open market, sometimes even at a higher rate. This indicates that the traders, hoarders and middlemen are buying the crops from the peasants at a low price and selling it in the open market at a higher price. The peasants are not getting an appropriate price due to this manipulative scheme of the middlemen.
Besides this, there is another reason. The cost of production is increasing every year. Agriculture has become more and more dependent on the seeds of the multinational companies, cultivation of which requires a large amount of fertilizers and pesticides. The cost of these seeds, fertilizers and pesticides are increasing every year. The profit of the multinational companies producing seeds, fertilizers and pesticides are increasing continually. The cost of irrigation is increasing due to the rise in the prices of petrol, diesel and even electricity which is also added to the cost of production. But the production is not increasing at par with the increase in the cost of production. Everyone is unanimously agreed that the rate of increase of production has got arrested at a certain level. Not only this, decrease in production of crops due to poor quality of seeds or severe pest attacks has become a recurrent feature nowadays. So without taking any measures against those traders-hoarders-middlemen who thrive on agricultural production like parasites or against the multinational companies producing seeds, fertilizers and pesticides who by power of their monopolistic control are selling at exorbitant prices and even many a times unnecessary and harmful products at a higher price by misleading the peasants, the problem will not be solved at all by increasing the minimum support price. Rather it will deepen more and more. So the working class cannot support this demand.
Who Are There Behind The Movement On The Demand Of Minimum Support Price?
The question arises that are there only a small number of rich peasants behind the present demonstrations of the peasants? It is hard to believe that only rich peasants are taking part in these demonstrations because of the scale of the demonstrations and the number of peasants participating in these demonstrations. Probably the poor and the middle peasants, even agricultural labourers are participating in these demonstrations.
We have shown earlier that all the peasants are afflicted on the one hand by the problem of rise in the production cost and on the other by not being able to get commensurate price for their crops. As a result, all the peasants will want to rally behind the demand of increase in the price. They will stand in favour of this demand with the expectation that by getting some additional amount they may be able to an extent to payback their loans. With this hope they can support this demand. Whatever it be though they may be relieved temporarily but at the end they will be loser by being compelled to buy the food grains at a higher price. It is not that they cannot realize this truth, but they are impelled by the immediate gain.
Secondly, the dominance and influence of the rich peasants and the big landowners in rural areas is quite strong. The poor and the middle peasants and the agricultural labourers have to remain dependent on them in various ways. The weakness of class struggle in rural areas, especially the absence of any organization or struggle representing the interests of the poor peasants and the agricultural labourers may lead not only the middle peasants but also the poor peasants and the agricultural labourers to stand on the side of the rich peasants forgetting their own class interest. Without taking this reality in its entirety into consideration, it will be erroneous to infer only by noting the participation of the poor peasants and the agricultural labourers that these are the movements of not only the rich peasants but of the whole of the peasantry, the interest of all sections of the peasantry is linked with it. The most dangerous aspect is that if the poor peasants and the middle peasantry cannot be pulled out from the influence of the rich peasants, then the rural class struggle, the interest of the poor peasants and the agricultural labourers has to be sacrificed, which will be severely detrimental for the future rural class struggle, the revolutionary peasant movement. So it is necessary to think over the way by which a permanent solution to the problems of the agricultural labourers and the poor and the middle peasants can be reached instead of going for a temporary solution. However tough and long-drawn that path may be, the advanced class-conscious proletariat, the rural proletariat and semi-proletariat must search for that path. It must be remembered that the development of agriculture does not always mean development in the lives of poor peasants. It may also mean development of agriculture by evicting peasantry, by inflicting extreme losses on them. Hence the question arises to what we should be committed, to the development of agriculture or to the development of the lives of the agrarian society in its totality by uprooting the rule of exploitation imposed upon them.
The real cause of the problems of the peasantry is that agricultural system of our country has not been able to free itself fully from the influence of feudalism till date. Major part of the arable land in our country is under the grip of the non-peasant landowners. They survive on the income from exploitation of the peasants to whom they share out or lease out the land. Their income is never invested in agriculture as they are not directly involved in agricultural production. On the other hand, a group of traders, hoarders and middlemen are making huge profit from exploitation of the peasants and other poor people by means of monopoly ownership of the lion's share of agricultural crops. Not even a part of that profit either is returning to agriculture. Usury capital is appropriating a large part of the surplus labour of the poor and the middle peasants even today. Majority of the poor and the middle peasants do not have any surplus which can be invested in agriculture. Only some rich peasants and land owners, who cultivate in capitalist mode, invest a part of their profit in agriculture. As a whole our agriculture is in a backward condition still now - far from implementing modern and scientific method. Most of the arable land in our country is divided in small plots. Cost of cultivation in these small areas is high and there are many difficulties in implementing modern methods.
Without bringing a radical transformation of such a production relation a programme for agrarian reform dependent on imperialism has been adopted from above. The imperialists had introduced cultivation of high-yield seeds which is dependent on chemical fertilizers with an aim to create a market for their seeds, fertilizers and pesticides in the name of development of Indian agriculture. Though it initially increased production, but later it made agriculture totally dependent on the imperialists. From the monopoly of the seeds, fertilizers and pesticides they are now advancing to lay hold of crops and land. With the programme of imperialists, agriculture in our country has become totally dependent on chemical fertilizers. Natural fertility of the land has been ruined due to continual incremental use of chemical fertilizers in the same tract and application of extremely noxious pesticides. As a result it is observed now that production is not increasing any more even after applying extra fertilizers. This problem is pushing agriculture towards a permanent devastation.
Thus, a handful of the rich peasants and the big landowners are being benefitted by way of increasing MSP or doling out bank loans or waiving of loans. On the other hand, the poor and the middle peasants along with small landholders are trying to find a route to escape in the face of mounting losses. The rich peasants and the big landowners and the multinational companies will take this opportunity to grab the land of the peasants and to force them to go for contract cultivation which will in effect turn them into labourer.
The question arises that those who declare themselves as the advanced conscious section of the working class, who talk about agrarian revolution, will they ask the poor peasants and the agricultural labourers to rally in the movement demanding increase in MSP and bank loans in the interest of and for the betterment of the rich peasants and the big landowner? Or shouldn't they have to show the poor and the middle peasants and the agricultural labourers the way to come out from the leadership of the rich peasants and to advance towards independent revolutionary struggle for emancipation from the oppression and exploitation of the non-peasant landowners and the agents of feudal interest, the big capitalists and the imperialists?
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