Kerala Only State That Pays MSPs as per Swaminathan Commission Recommendations

Prime Minister Narendra Modi while releasing Rs 18,000 crore on Friday as the next Rs 2000 installment to eligible farmers under the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) programme, accused the opposition parties of misleading the agitating farmers that they would not benefit from the recent farm laws.

He attacked the West Bengal government saying that by not accepting central funds under PM-KISAN, the state government is denying benefits offered by the central government to the farmers.

PM Modi even claimed that there are no APMC (Agriculture Produce Market Committee) market yards in Kerala but the state government is opposing the farm laws.

The Union government, by enacting the three farm laws, is opening the markets to private players by withdrawing itself from agriculture altogether. Agitating farmers in the country are feeling threatened fearing that with the entry of private corporations, they will be denied MSPs (Minimum Support Price) on their produce.

Price Support and MSPs in Kerala

Presently, Kerala is providing the highest MSP to paddy farmers in the country. The state government is offering Rs 2,630 per quintal as against Rs 1,886 announced by the Union government. However, with the bonus of Rs 780 per quintal provided by the Kerala government, the rice cultivators in the southern state earns a return of 44% over the average cost of production per quintal.

In the last two years, the policy interventions by the Kerala government have tried to offer an alternative course against the controversial agricultural policies in India, including the anti-farmer and pro-corporate laws enacted by the Union government.

The Cost of Cultivation/Production of Principal Crops estimated by the Union Agriculture Ministry shows that the cost of production of rice (that is the sum of all paid-out costs or Cost A2) was Rs.1,511 per quintal in Kerala for the triennium ending 2017-18 as against Rs. 1,133 per quintal across India. The cost of production in Kerala is the second highest among 18 States.

The MSP for Paddy, for example, as announced by the Union Ministry of Agriculture and Farmers’ Welfare is Rs 1,865 per quintal for the 2020 Kharif season. The Kerala government has been consistently providing a state incentive bonus over and above the MSP set by the Centre. At present, this bonus itself is about half of the MSP set by the Union government.

Kerala is providing the highest MSP to paddy farmers in the country, i.e., Rs 2,650 per quintal of Paddy. By adding 50% more to the cost as bonus to the Union government’s offered MSP, Kerala has become the only state in the country that is implementing Dr. Swaminathan Commission’s recommendations in true spirit.

Kerala’s support for agricultural produce is not limited to rice. The state government recently extended the MSP regime to 16 vegetables, a first for such a policy in India. The government has ensured direct procurement from farmers of vegetables and fruits including banana, pineapple, ginger and others. Kerala also has a strong network of cooperative institutions working democratically and transparently across the state to ensure payment of MSPs in markets.

Absence of APMC Markets in Kerala

It is a fact that Kerala does not have any Agricultural Produce Market Committee (APMC) or mandis. There are good reasons for this. The production of food crops such as paddy and pulses is limited (most of it is imported from other states), and there is not much surplus left to trade in APMC market yards. There are six major wholesale markets (in Thiruvanantapura, Khozikode, Ernakulam, and Wayanad). These markets are already integrated with recently established E-market network. To weed out middle men and protect small farmers in the markets, Kerala State Civil Supplies Corporation (SUPPLYCO), along with different cooperative institutions and local self-government institutions procure rice, vegetables and fruits.

Cultivation of Paddy is limited in Kerala (11.86% among all food crops) as compared to other states. The major cultivated area (~ 82%) is occupied by plantation crops like rubber and spices such as black pepper and fruits like coconut. Th state government’s horticultural board is actively involved in procurement and assistance of export of various spices and plantation crops.

The Left government in Kerala has announced that it will be challenging the farm acts in the Supreme Court, contending that they violate federal principles enshrined in the Constitution.

What stands out in the policy of state intervention is the method of intervening in agricultural markets. This is an alternative path for agricultural policies in India.