Indian villager loads bamboo on a cart in Chhattisgarh
FarmersREUTERS/Kamal Kishore

The Central government on Monday increased the minimum support price (MSP) for wheat and five other rabi crops, in what is being seen as a measure to placate angry farmers who fear the recently passed farm bills will end the MSP support.

The rabi crops for which MSP has been increased include wheat (Rs 50 per quintal), barley (Rs 75 per quintal), gram (Rs 225 per quintal), lentil (Rs 3000 per quintal), mustard (Rs 225 per quintal) and safflower (Rs 112 per quintal), Union Agriculture Minister Narendra Singh Tomar said.

MSP hike clears cabinet

The MSP hike cleared by Prime Minister Narendra Modi-led Cabinet Committee on Economic Affairs is seen as a move to ally apprehensions among the farmer community and send a strong message to the country that the MSP system is going to stay after implementation of the new agriculture laws.


The development comes a day after the two contentious bills – Farmers' Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, and Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020 - were passed amid unprecedented opposition protests in the Rajya Sabha.

Prime Minister Narendra Modi said, "higher MSP will empower farmers and contribute to doubling of their income". "Increased MSP, along with the series of agriculture reforms passed by Parliament will ensure dignity and prosperity of farmers. Jai Kisan!," he tweeted.

The decision was followed by main Opposition party Congress deciding to launch countrywide protests against the new farm bill which, it described as 'anti-farmer'. "Congress is launching agitation against the government for passing these anti-farmer and anti-people laws," Former Union Minister AK Antony told media persons after a party meeting in Delhi.

Captain Amarinder Singh, Chief Minister of Congress-ruled Punjab, termed the decision as a cruel joke on farmers who, he said, are "consistently looking for a written assurance that MSPs will not be abolished for it's their livelihood. Also, centre has failed to announce a bonus of @100/quintal for stubble management".

Thousands of farmers are on streets across Punjab and Haryana to protest the agriculture bills which, they fear will expose them to manipulation of markets by corporate houses and abolition of food grain mandis. Many farmer unions have called for multiple protests in the coming days, including a total shutdown on September 25.

Removing the middleman

Punjab farmers
Farmers allege that the ordinance would demolish the conventional mandi system by disbanding assured marketing system and discontinuing the Minimum Support Price (MSP).Courtesy: Reuters

The government says the two bills will make it easier for farmers to sell their produce directly to big buyers and the new laws will reform antiquated laws and remove middlemen from agriculture trade, allowing farmers to sell to institutional buyers and large retailers like Walmart. The bills also make contract farming easier by providing a new set of rules.

The government stubbornness to go ahead with the bills, despite protests, forced Shiromani Akali Dal MP Harsimrat Kaur Badal to quit the Union Cabinet last week.

The opposition parties have said farmers' bargaining power will be diminished by allowing retailers to have tighter control over them. They also fear that the Agriculture Produce Marketing Committees (APMCs) will be abolished under the new laws and in their absence, the MSP system will practically seize to exist. Congress has demanded that the government include it in the law that MSP will not be abolished, to which Defence Minister Rajnath Singh said it was never mentioned in any of the related laws.