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India braces for farmer protests over Modi price 'betrayal'

Staff Writer | July 20, 2018
Indian Prime Minister Narendra Modi's pre-election move this month to raise minimum prices for summer-sown crops has failed to impress farmers, who have revealed plans for nationwide protests.
Indian farmers
Asia   Indian farmers say higher minimum support prices is a "blatant fraud"
The government's announcement of higher minimum support prices is a "blatant fraud" and "betrayal" of promises made to farmers, the All India Kisan Sangharsh Coordination Committee, an alliance of around 150 farmers' organizations, said late last week.

The MSP is a government-fixed benchmark announced before the crop-sowing seasons and is designed to protect farmers from a sharp fall in prices due to a bumper crop. On July 4, the government revealed the steepest MSP increases since the fiscal year through March 2014, providing a 50% return on input costs to farmers as pledged in this fiscal year's budget.

Among the more than two dozen crops covered by the system are rice, for which the support price was increased by 13% to 1,750 rupees ($25); maize, which saw a 19.3% hike; and soybeans, which received a 11.4% bump.

The farmers' alliance, which will hold a demonstration in the national capital on Friday and a series of protests elsewhere over the next four months, said it was not satisfied given that the costs of inputs such as diesel, fertilizer and electricity have been rising too.

It said the government limited the increases to only 14 crops, while farmers had been demanding hikes for all their produce, including fruits and vegetables.

While government agencies procure a significant portion of farmers' wheat and rice at the MSP, there is no mechanism in place to ensure that growers get the MSP for other crops purchased by private buyers. The government procurement system tends to favor farmers in states with a surplus of grains, like Punjab and Haryana, versus those cultivating other crops.

"Most significant is the lack of any plan to ensure procurement of the crops for which MSP has been announced," the farmers' coalition said in a statement. "Only 28% to 30% of wheat and 30% to 35% of [rice] is procured while for coarse grains the procurement is less than 1%."

Modi, however, has described his MSP policy as "historic."

"While previous governments paid lip-service to farmers, [the Modi] government has left no stone unturned in facilitating a qualitative difference in their lives," the prime minister tweeted on Monday.