Agriculture

Interview: Modi’s Claim That MSP Increase Is Historic Is a Historic Lie, says Yogendra Yadav

In an interview with The Wire, the national president of Swaraj India says that the Modi government has lied to farmers on the MSP issue and that farmers remain a low priority for the government.

New Delhi: For the last two years, farmers across the country, distressed by declining incomes, have taken to the streets to protest. One of the leaders of the national peasant movement is Yogendra Yadav, who for several years has been a public intellectual with considered views on socio-economic issues. In an interview with The Wire, Yadav talks about the various issues plaguing farmers across the country, starting with the debate around minimum support prices (MSP).

Excerpts from the interview:

In his election promises, Prime Minister Narendra Modi had on multiple occasions promised to implement the recommendations of the Swaminathan Commission on farmers and raise the minimum support price (MSP) offered to farmers to 50% above the cost of production. Recently his government announced that for the kharif season 2018-19, the government has increased the MSP to 50% over cost of production. He essentially claims that the election promise has been fulfilled. Is this true?

This is a big lie. The prime minister projects every action of his as historical. This is a historical lie.

Let us look at it one by one. What has he claimed? First, that he has fulfilled his election promise. Second, that he has increased the MSP in a historic way in which no one else has ever increased it. Third, that the farmer has received what he wanted. All three are lies.

First, the election promise was that the farmer will get a price which is 50% higher than his entire cost of production. The entire cost means C2.

C2, which stands for comprehensive cost.

Yes, you can understand it as the entirety of cost. Now they have made it partial cost: this differs from whole cost in the sense of whether the imputed rent of the farmer’s land is included in it or not. Every shopkeeper or landowner includes this in his cost – just because my father has land does not mean he bears no cost for holding that land. If I want, I can give that land to someone else.

So, this is essentially the opportunity cost of owned land – the value of the rent that the owner would have received if the land had been rented out.  

Yes. And this distinction between whole and partial cost makes a huge difference. I’ll explain using some figures. If you take partial cost, the cost of producing paddy is Rs 1,166. The government provides Rs 1,750 for it. The government is patting itself on the back for giving this amount. But if you take the whole cost (these are government provided-figures, not my own), the cost of paddy is Rs 1,560. So the farmer should receive Rs 2,340. If Modi were to fulfil his promise, he would have to provide Rs 2,340 per quintal for the paddy. This is his first lie.

The second lie is about it being a historical increase of MSP. If your record of history starts in 2014 and consists only of the past four years, then yes, I agree that the increase was historic, because you did nothing for the first four years. If you actually look at history, it is not uncommon to distribute sweets to farmers before an election. In 2008, the UPA did it too and for every harvest, the increase in MSP that the UPA provided was larger than this.

When Manmohan Singh’s government distributed sweets among farmers, it did not mean it was a farmer-oriented government. They were afraid of losing elections. They increased the MSP of paddy by 65%. The current government has actually only increased it by 13%.

So this has been done before, and to a larger extent?

Multiple times, and it has been increased much more in the past. And the third lie is that the farmers have been given a huge gift or something. They have been given nothing!

Has the farmer been given what he wants?

See, what the farmer wanted was related to the whole cost. What the farmer wanted was the implementation of the recommendations of the Swaminathan Commission report.

And this is a significant issue. All farmers’ protests and agitations, which have gained strength in the last two years, bring up the MSP issue first in their discussions.

Now if they had implemented the actual recommendations of the commission, which the farmers asked for and which Modi himself promised to, then paddy would receive Rs 2,340. They are giving Rs 1,750. Jawar would get Rs 3,275, they are giving Rs 2,430. Ragi should get Rs 3,555, cotton should get Rs 6,771 but is given Rs 5,150. So the promise has not been fulfilled.

So the prime minister’s first, second and third claims are all lies. The election promise has not been implemented, the farmers have not got what they wanted and it is not a historic change. All the farmers have got is an announcement. Other governments have done this before and done it better. The real change for the farmers will take place when these will be genuinely implemented.

And the question also is, how useful these announcement of MSP really are to the farmer? Government studies have shown that only 6% farmers are actually able to benefit from MSP.

Look. What is the MSP? The MSP is a promise by the government: you are growing crops and if they are selling at good prices in the market, then good. But if the price falls below a minimum, then come to us and we will give you at least that much.

So the assumption is that the farmer should receive more than that minimum amount in the markets.

And if he doesn’t receive more than that amount, than I (the government) am here to ensure you get it. I am here.

Theoretically, this means that the MSP ensures that the price will not fall below this minimum amount.

Yes, this is what it should be. Now the reality is that ordinarily, the MSP becomes the maximum price for the farmer that only some farmers get. What does the government buy? Only wheat and rice. MSP is announced for 14 crops. Yet only two are actually bought by the government. For the rest, if you can sell them somehow then that’s it.

For rice, of all the rice produced in the country, the government buys one-third. Of all the wheat produced in the country, the government buys one-fourth. It buys 0.2% of all the bajra produced in the country. So in all ways, the farmers are being exploited. The MSP exists only on paper. The farmer comes ready with his crop and asks the government to buy it. The government says the arrangement does not exist in your district, the centre will open 15 days later here. Or it closed ten days ago and you’re late. Or you do not have the required paperwork.

But how will farmers’ organisations counter the propaganda of the government that claims that MSP has been provided at cost plus 50%? The entire government machinery has been put to use, meetings are being held to drive home this point. Farmers’ organisations don’t have that kind of machinery and capacity. How will you counter this?

We have neither the machinery, nor money. But we have the most important media source in the country: the spoken word. When one farmer tells another “this is a lie”, it is more influential than what people see on TV screens. This government has also taken half of the country’s independent media into its pocket. The other half remains afraid of the government. But we have decided that if the government holds 40 meetings on this issue, we will hold 400 such meetings.

Let’s talk about possible solutions. The NITI Aayog has said that it would be impractical if the government gives 50% over C2, because it will be difficult to maintain fiscal discipline and inflation could rise. This is based on the assumption that they will actually provide this 50% increase, though. Various other systems – in Telangana there is a system of direct transfers, Arvind Subramaniam has talked about the idea of Universal Basic Income – what do you think about these ideas?

There are several ways to improve the welfare of farmers. You can use a price mechanism, or an income mechanism. Whichever mechanism benefits the farmer will be acceptable to us. That is not the issue. Farming today means farming with losses. This needs to turn into farming where hard work can produce savings instead of losses.

There is also a frequently made argument that productivity should be increased. In reality, today, we see surplus being the problem.

I have said again and again, the agricultural policy of this country has always been production-oriented instead of being producer-oriented. That is the entire problem. The farmer is not affected by where your production levels have reached. The dilemma is that when production increases to such an extent, the farmer is killed.

The Madhya Pradesh government has received many awards for its productivity levels, but the farmers in MP continue to suffer.

That is why, do not look at production. Look at the producers. This country has a lot of production, congratulations, give yourselves a trophy. Now please pay attention to the producers. Let’s save the farmer. And there are two formulas for this: first, the farmer should get a legal guarantee for the MSP. The Commission for Agricultural Costs and Prices, which determines the price, is under the thumb of the government and is run by the yes-men of the ruling party. This should be made an independent, accountable commission, whose recommendations should be binding. Farmers should have the legal right to get at least the MSP for their produce. They should have the right to go to court, file a case and get compensation if they do not get the MSP.

The agricultural policy of this country has always been production-oriented instead of being producer-oriented. That is the entire problem.

Second, today the farmer is badly caught in debt. The farmer will have to be exempted from this debt one time. This is not pity or begging. For 11 years, the farmer has been denied the Swaminathan Commission recommendations. The arrears of 11 years turn out to be Rs 22,00,000 crore, the farmers’ loan is Rs 14,00,000 crore. Exempt them of this debt, so that the farmer can stand up. Once this is done, once the patient has come out of the ICU, then you can give him the other treatments.

But today India’s farmer is handling three crises at once: economic crisis, ecological crisis and existential crisis.

On loan waiver, bankers and economists say the problems of credit indiscipline and moral hazard arise.

I never heard these political scientists say this when Manmohan Singh’s government gave a package of Rs 3,00,000 crore to our industries. This was because the 2009 financial crisis erupted in the US and Rs 3,00,000 crore was put into the pockets of our industry. No one was afraid then.

For the past three years, the NPA problem in the banks, all the money in the banks which has been drowning, how much of it belongs to the farmers? Not even 2%. Then there was no problem of ‘moral hazard’. It all depends on what your priorities are.

To that, they say that was a loan write-off and this is a loan waiver. Technically, loans written off remain receivable while those waived off are not receivable.

You know what, ‘write-off’ the loans of the farmers too. All these fancy English words, they save these for others: ‘restructuring’, ‘write-off’. Use all these nice words for the farmers. Restructure the loans of the farmers. Tell them that if they are in the state to pay it back in five years, they can, otherwise postpone it another five years.

The real subject is that of political priorities. You said economists claim it will cause ‘fiscal indiscipline’. This means ‘I have money to pay for my child but not to pay for my mother’s illness.’ This would mean my mother is not my priority.

Are farmers today the priority of the country, or are they not? This will determine whether the government has money in its pocket for them or not. The question of farmers is a political question. It is the biggest political question. That is why this question needs to be raised within politics.

Why do you think the farmer has fallen behind when it comes to political priorities? We have seen tall farmer leaders in India like Chaudhary Charan Singh. Why has farm politics fallen behind?

The truth is that for the past 70 years, what we call ‘progress’ has been against the interest of farmers. Through protest every now and then, the farmer can steer this closer to his interest – which Chaudhary Charan Singh, Mahendra Singh Tikait, Sharad Joshi and Nanjundaswamy did in their times. In the last 20 years, there has been no mass farmers’ agitation movement in India. The establishment assumes that the farmers go on agitating and protesting but in five years when the time to vote comes, they will vote based on caste and community lines. If that doesn’t work, Hindu-Muslim divisions can always be created within political dialogues.

The day the establishment realises that the farmer will stand as a farmer, the day the farmer proclaims that his caste and religion are his identity as a farmer, then we will see what happens.

We are witnessing that around India, especially in the past one year after Mandsaur, many farmers’ organisations have emerged. You are part of an umbrella organisation as well, within which there are many organisations from around the country. Do you think we will see a revival of farm politics in the 2019 elections? How successful will your movement be?

We are already seeing the revival. What happened in the Gujarat election? Why did the JD(S) come to power in Karnataka? Why has the BJP been losing so many by-elections? It is not just about opposition unity. The problems of the rural and agricultural populations are coming forth. For the first time in history, about 200 farmers’ organisations have come together on one platform. For the first time, farmers and farm labourers have stood together. The plan for the next four months which we have declared will shake these people up. The government says it will gold 40 meetings to publicise the MSP increase. We will hold 400 meetings.

The truth is that for the past 70 years, what we call ‘progress’ has been against the interest of farmers.

On 20 July, two bills will come in front of the parliament. Farmers will stand in front of the parliament and support these. This time, for MSP, farmers will stand in the markets with sacks full of grain and demand the fulfilment of Modi’s election promise. And on November 30 this year, farmers will march to Delhi from all over the country and all of India, and Delhi, will witness the power of farmers. Then the country will understand. There is compassion in India. The urban populations are understanding.

We saw when the farmers’ march from Nasik to Mumbai took place, people from Mumbai came to support it. Do you think this will happen in Delhi too?

That was just a glimpse of what is to come, from farmers of one district. This will be much bigger. This time we will see farmers of the entire nation being represented. The people of Delhi and the farmers will unite. Dilli mein bhi gaon basta hai, aur gaon mein bhi dilli (Villages are set up within Delhi, and villages have a part of Delhi in them as well). We are preparing for the big change that is going to come. We will unveil the truth about the exploitation of the farmers and the lie of MSP. Farmers’ organisations will not contest elections themselves.

Yet one thing has been decided: the 2019 Lok Sabha elections will be determined by the vote of the farmers.

This interview was conducted in Hindi. The transcript and translation was prepared by Bani Bedi.