Farmers from over 20 districts in Uttar Pradesh to protest against issues related to land acquisition and agricultural reforms.

Key Highlights of the Protest

• The protest was led by Bhartiya Kisan Parishad (BKP) in coordination with other farmer groups, including Kisan Mazdoor Morcha (KMM) and Samyukt Kisan Morcha (SKM).
• Main Demands:
  • Legal guarantee for Minimum Support Price (MSP).
  • 10% allocation of developed plots to farmers who lost their land.
  • Increased compensation (64.7%) for land acquisition, especially for those who have yet to receive it.
  • Implementation of the Land Acquisition Act, passed in 2013.

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About Minimum Support Price

• Definition of MSP: The Minimum Support Price (MSP) is a market intervention mechanism established by the Government of India to protect agricultural producers against a sharp decline in crop prices, especially during bumper production years.
• Legal Status: MSP does not have statutory backing in law, meaning it is not legally binding.
• Announcement Authority: MSP is announced by the Cabinet Committee on Economic Affairs (CCEA), which is chaired by the Prime Minister of India.
• • The announcement is based on recommendations made by the Commission for Agricultural Costs and Prices (CACP).
  • CACP projects three kinds of production cost (A2, FL and C2 ) for every crop at state and all-India average levels.
  • CACP considers both A2+FL and C2 costs while recommending MSP.
  • CACP reckons only A2+FL cost for determining MSP.(~1.5X (A2+FL))
    • However, C2 costs are used by CACP primarily as benchmark reference costs (opportunity costs) to see if the MSPs recommended by them at least cover these costs in some of the major producing States
• Timing of Announcement: The MSP is declared at the beginning of the sowing season to help farmers plan their cropping patterns.
• Crops Covered Under MSP:
  • Total Crops: MSP is recommended for 22 crops, along with a Fair and Remunerative Price (FRP) for sugarcane.
    • It’s important to note that for sugarcane, the FRP is determined by the Department of Food & Public Distribution.
  • Kharif Crops (14): Paddy, Bajra, Jowar, Maize, Arhar (Pigeon Pea), Ragi, Moong (Green Gram), Groundnut-in-shell, Urad (Black Gram), Soybean, Niger Seed, Sunflower, Sesamum, and Cotton.
  • Rabi Crops (6): Barley, Wheat, Gram, Rapeseed/Mustard Seed, Masur (Lentil), and Safflower.
  • Other Commercial Crops (2): Copra and Jute.
• Additional MSP Fixation:
  • The MSP for Toria is based on the MSP of rapeseed and mustard.
  • The MSP for de-husked coconut is derived from the MSP of copra.

Pro and Con of MSP as a Legal Right

Government Arguments Against MSP as a Legal Right

• WTO Limitations:  One of the primary concerns regarding MSP and its potential conflict with WTO regulations is the de minimis rule. 
  • This rule sets a limit on the level of domestic support that countries can provide to their agricultural sectors without triggering trade disputes.
  • India’s MSP program, particularly when implemented rigorously, could potentially exceed this de minimis limit. This could invite challenges from other WTO member countries, especially those that are major agricultural exporters.
  • Export Restrictions: To protect domestic markets and ensure MSP is effective, India might impose export restrictions on certain agricultural commodities. However, such measures can be challenged at the WTO as they can disrupt global trade.
  • India’s Stance: India has consistently argued that its agricultural policies, including MSP, are essential for food security and rural development.
    • It contends that these policies are necessary to protect its vulnerable farming community and maintain stable food supplies
• Existing Policies: The government argues that existing policies, such as MSP and procurement operations, already provide sufficient support to farmers.

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Global Practices of Market Intervention Mechanism

• Price Support Programs: Governments set a minimum price for agricultural products and purchase surplus production to maintain the price floor.
  • Example: The European Union’s Common Agricultural Policy (CAP) has historically used price support mechanisms to protect farmers’ incomes and ensure food security.
• Input Subsidies: Governments provide subsidies on agricultural inputs like fertilizers, pesticides, and seeds to reduce production costs for farmers.
  • Example: Many developing countries, including India and China, have implemented input subsidy programs to boost agricultural productivity and ensure food self-sufficiency.
• Export Subsidies: Governments provide subsidies to exporters to make their products more competitive in international markets.
  • Example: The United States has used export subsidies for agricultural products like cotton and wheat to support domestic producers and increase market share.
• Trade Restrictions: Governments impose tariffs, quotas, or other trade barriers to protect domestic producers from foreign competition.
  • Example: The United States has imposed tariffs on agricultural imports, such as sugar and dairy products, to protect domestic producers.

Land Acquisition Act 

• The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 replaced the archaic Land Acquisition Act of 1894.
• Key changes brought by the Land Acquisition, Rehabilitation and Resettlement Act, 2013:
  • Unlike the old Act, the new Act will provide for rehabilitation and resettlement of people displaced by land acquisition.
  • Consent: Earlier there was no requirement for prior consent. The new Act makes it necessary to obtain consent of 80% land owners required for private projects and 70% landowners required for Public-Private Partnership Projects.
  • Increasing the compensation value: Higher compensation of 4 and 2 times of market rate for land acquisition in rural and urban areas respectively.
  • SIA: The earlier Act did not take into account the impact of land acquisition on different sections of society.
    • This issue has been addressed by introducing social impact assessment (SIA) prior to land acquisition.
  • Restrictions on agricultural land: There is restriction on land acquisition of irrigated multi-cropped land. It addresses the issue of shrinking agricultural land.
  • Special safeguards for tribal communities are expected to solve the issue of tribal displacement.

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