News By/Courtesy: Varsha Subramaniam | 25 Oct 2020 15:24pm IST


  • The Farm Bills do not give any statutory backing to MSP.
  • The denial of MSP has been cited as a contributing factor to farmer suicides.
  • The new law almost dismantles the monopoly of APMC .

Now, the newly passed farm trade Bill has raised concerns that farmers may no longer be assured MSP for their crop, and criticisms are all over the country about why MSP is not even mentioned in the new law or in existing ones. The new law almost dismantles the monopoly of APMC (Agricultural produce market committee) market yards, allowing sale and purchase of crops outside APMC markets, which does not include any provision safeguarding the continuance of the existing MSP based procurement regime.

The Farm Bills do not give any statutory backing to MSP. The Agricultural Minister on behalf of the government explained the Bills, saying its objective is simply to grant farmers and traders the freedom of choice to buy and sell agricultural produce outside the APMC markets, thereby eliminating the middlemen. MSP’s access, unlike subsided grains through the PDS (Public Distribution System), isn’t an entitlement for farmers as it does not have any legal backing and can’t be demanded as a matter of right, which it should be.

Why is the MSP (Minimum Support Price) needed?

MSP is only a government policy that is part of administrative decision making. The government declares MSP’s for crops, but no law mandating its implementation. The Centre fixes MSPs for 23 farm commodities: 7 bowls of cereal (paddy, wheat, maize, bajra, jowar, ragi, and barley), 5 pulses (groundnut, soya bean, sunflower, sesame, safflower, niger seed, rapeseed-mustard), 7 oilseeds and 4 commercial crops (cotton, sugarcane, copra, and raw jute) based on the CACP’s (Commission for Agricultural Costs and Prices) recommendations. But the CACP itself is not any statutory body set up through an Act of Parliament, but just an attachment to the Ministry of Agriculture and Farmers’ Welfare. It can recommend MSPs, but the decision on fixing and enforcement rests finally with the government. The only crop where MSP payment has some statutory element is sugarcane, due to its pricing being governed by the Sugarcane (Control) Order, 1996 issued under the Essentials Commodities Act, where again the responsibility to make fair and remunerative price(FRP) payment to farmers within 14 days of cane purchase lies solely with the sugar mills.

So now, with the ultimate dismantling of the monopoly of APMC market yards in wholesale trading of farm produce the first step at ending even the present MSP-based procurement program. And also if APMCs were to turn unviable soon due to the trade moving outside, MSP, which basically came with APMC will also get collapsed and no more at a time.

‘The question of MSP is a matter of life and death for most farmers in India. The denial of MSP has been cited as a contributing factor to farmer suicides. Shouldn’t the states be striving to protect the rights under Article 21 for farmers, as a Constitutional right?’

For farmers, the freedom to sell to anyone, anywhere and anytime has little value compared to the comfort of assured procurement at MSP, especially to farmers of Punjab, Haryana, and Madhya Pradesh, where they have well-established systems of governmental MSP purchases.  The best possible solution for farmers to earn a good income, is not bringing corporate into agriculture and agro-trade with contract farming or electronic trading but a statutory right of MSP to back them up at all times.


This article does not intend to hurt the sentiments of any individual, community, sect, or religion, etcetera. This article is based purely on the author’s personal opinion and views in the exercise of the Fundamental Rights guaranteed under Article 19(1) (A) and other related laws being enforced in India for the time being.

Section Editor: Pushpit Singh | 25 Oct 2020 17:35pm IST

Tags : Farm Bills 2020

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