An unconstituitional harvest
About Minimum Support Price
- Minimum Support Price (MSP) is a form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
- MSP is announced every year before the sowing season to provide incentives to farmers for raising the production of the crops.
- It is approved by the Cabinet Committee on Economic Affairs based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
- The Centre currently fixes MSPs for 23 farm commodities — 7 cereals (paddy, wheat, maize, bajra, jowar, ragi and barley), 5 pulses (chana, arhar/tur, urad, moong and masur), 7 oilseeds (rapeseed-mustard, groundnut, soyabean, sunflower, sesamum, safflower and niger seed) and 4 commercial crops (cotton, sugarcane, copra and raw jute).
- Cost of production (CoP) is one of the important factors in the determination of MSP of mandated crops.
- Commission for ‘Agricultural Costs and Prices’ (CACP), considers other important factors such as demand and supply, price trend in the domestic and international markets, inter-crop price parity.
What is the issue?
- Since independence, Minimum Support Price (MSP) has served as an insurance to farmers, in the form of income security for their produce yet, it has no legislative backing
- Recently, the three laws were passed by the Central government which described it as necessary farm reforms.
- Two of these being Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Act (FPTC Act), and the Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Act (FAPAFS Act), none refer to the MSP.
Abuse of federalism
- Agriculture falls within the exclusive legislative competence of State governments, through Entry 14 of the State List. However, the Acts in question have been enacted by Parliament, seemingly deriving the legislative competence to do so under Entry 33 of the Concurrent List, which deals with ‘trade and commerce’ of some products listed in that Entry.
- The definitions of ‘farmer’ and ‘farming produce’ are at the heart of these laws, as they lay out the items in which any trade beyond the mandis can take place.
- Including the vast majority of agricultural produce in such definitions amounts to breach of legislative competence by the Union government as it is the States which are empowered to enact laws regulating ‘agriculture’.
The way forward
- States can consider declaring all of their territory as ‘mandi’ to circumvent the effect of these laws, if their respective APMC Acts permit the same.
- There exists a strong case for aggrieved State Governments to invoke Article 131 of the Constitution and file a suit challenging the vires of the two laws.
- Article 254(2) can be invoked to negate the three farm laws.
- State governments could also explore the potential of granting MSP a legislative backing, at least within the mandis, since any MSP is not a legally enforceable right with farmers. This move would incentivise farmers to sell their produce at the mandi at assured rates rather than expose themselves to the whims and caprices of private players.
Article 254(2)
Article 131
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Reference:
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