Understand what is farmers bill and what is MSP – Know what is MSP, how is minimum support price fixed, things you need to know about the three farm bills, and why are farmers protesting against the new farm laws?
What is MSP (Minimum Support Price)?
MSP is the price that the government fixes on agricultural products to buy directly from the farmers. The rate of MSP on the agricultural product act as a safeguard for the farmers to a minimum profit for the harvest, in case the open market has a lesser price than the cost incurred.
Understand what is farmers bill and what is MSP?
How is Minimum Support Price or MSP fixed?
The government fixes the Minimum Support Price (MSP) for 22 important agricultural crops on the recommendations of the Commission for Agricultural Costs & Prices (CACP). While calculating MSP, CACP considers various factors including cost of production, overall demand-supply of crops in domestic and international markets, trade between agriculture and non-agriculture sectors.
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Now here is all you need to know about the three farm bills:
Farmer’s Produce Trade and Commerce Bill, 2020 (Promotion and facilitation)
This Bill allows the farmers to sell their products outside the Agricultural Produce Market Committee (APMC) markets. The APMCs are government-controlled mandis. So, according to this bill, the farmers have more choice on who they want to sell.
Farmers Agreement on Price Assurance and Farm Services Bill, 2020 ((Empowerment and Protection)
This bill set up a framework for contract farming. In this bill, the farmer and the buyer can strike a deal before the actual production happens. This law was passed in September 2020.
What is farmers bill and what is MSP, three farm bills
Essential Commodities Bill 2020 (Amendment)
Essential Commodities (Amendment) Bill 2020 allows intra-state and inter-state trade of farmers’ products beyond the physical premises of APMC markets. In this bill, the State governments are prohibited from levying any market fee or cess.
Why are the farmers of Punjab, Haryana, and UP upset and protesting?
The farmers of Punjab, Haryana, and UP are upset with the provisions of these Bills as they are worried that for these Bills being the platform that the Central government is setting up for the scrapping or replacement of the strong support system currently prevalent in their states for the crops purchasing. They are also worried that the MSP guarantee which has been working as their safety net since the 1960s could be taken away from them under the pretext of providing better platforms. As per reports, around 85% of rice produced by Haryana farmers and 89% by Punjab farmers are procured by the Government. Surety of MSP encourages even farmers from areas with not enough water to grow rice. All this has resulted in a huge farmers protest.
Farmers protest 2020 is said to have now become one of the biggest protests in the history of the world.