What Swaminathan panel said
Context- The protesting farmers from Punjab have sent an email to the government with 12 demands. The first demand is for a law that guarantees the procurement of all crops at Minimum Support Price (MSP) for all farmers. They also want crop prices to be determined according to the recommendations of the Dr Swaminathan Commission. So far, three rounds of talks have been held in Chandigarh between three Union Ministers and the leaders of farm unions, but no conclusion has been reached. A fourth round of talks is scheduled for Sunday.
Swaminathan Commission: terms of reference, reports
- Agricultural scientist M S Swaminathan, a posthumous Bharat Ratna awardee, significantly contributed to Indian agriculture in the 1960s and 70s, aiding India in achieving food security.
- On November 18, 2004, the Ministry of Agriculture established the National Commission on Farmers (NCF) under his leadership.
- The commission, reflecting the Common Minimum Programme of the Congress-led UPA government, was tasked with suggesting strategies for food and nutrition security and enhancing the productivity, profitability, and sustainability of major farming systems in India.
- Between December 2004 and October 2006, the NCF submitted five reports totaling 1,946 pages, which were sympathetic to farmers and made several recommendations, including two on minimum support prices (MSP).
- However, the Swaminathan Commission did not recommend a legal guarantee for MSP or the formula for its calculation, which the farmers’ unions are currently demanding.
New deal for farm women, establishing of agri schools
- The first report of the National Commission on Farmers (NCF), titled “Serving Farmers and Saving Farming”, highlights the acute agricultural distress in the country, often leading to farmer suicides, due to inadequate public investment and action.
- A chapter, “A New Deal for Women in Agriculture”, emphasizes the need for support services, timely credit, and extension services for working women. It proposes a National Board for this initiative under the Union Food and Agriculture Minister, with other Union Ministers as co-chairs.
- The report also recommends establishing Farm Schools in the fields of innovative farmers to disseminate their methods, requiring an estimated investment of Rs 150 crore for 50,000 such schools.
- Additionally, it suggests setting up a grain bank, community food and fodder banks, promoting insurance, and creating a national network of advanced soil testing labs.
Recommendations anticipated reforms in repealed farm laws
- The second report of the National Commission on Farmers (NCF), titled “From Crisis to Confidence”, recommended a code of conduct for contract farming and suggested amendments to the state APMC Acts and the Essential Commodities Act.
- These recommendations were pro-market reforms-oriented and aligned with the three farm laws introduced by the Narendra Modi government in 2020, which were later repealed due to protests from farmers.
- The report advocated for amendments to the State Agriculture Produce Marketing Acts to encourage the private sector or cooperatives to establish markets, rationalize market fees and other charges, and allow marketing without the necessity of going through APMC/licensed traders.
- It also called for a review of the Essential Commodities Act and other legal instruments related to the marketing, storing, and processing of agricultural produce.
- The report suggested a farmer-centric ‘Code of Conduct’ for contract farming arrangements and recommended futures and options trading in agricultural commodities, regulated by a SEBI-like autonomous body.
What the Commission said on Minimum Support Prices
- The Swaminathan Commission did not recommend fixing the Minimum Support Price (MSP) based on C2 (actual cost of production) plus 50%, as demanded by protesting farmers.
- The Commission’s second report made two recommendations related to MSP: avoid delays in issuing MSP, particularly for Kharif crops, and improve the implementation of MSP across regions.
- The report noted that prices of agricultural commodities often fall below the MSP in the absence of government intervention, except in Punjab, Haryana, UP, and Andhra Pradesh to some extent. Despite its weaknesses, the report suggested that MSP may need to continue in the foreseeable future with improved implementation.
- The report discussed the cost of production and suggested that the Commission for Agricultural Costs and Prices (CACP), which recommends MSPs, should consider the variability of the cost of production, taking into account both paid and imputed values of unpaid factors in fixed and variable cost of production.
- However, it noted that the risk factor and marketing and post-harvest expenses are not taken into account.
- The second report highlighted the recommendations of the High Level Committee on Long Term Grain Policy, 2002, headed by economist Abhijit Sen.
- The Abhijit Sen Committee recommended that the CACP should base MSPs on the C2 cost of production in more efficient regions and indicate its estimates of A2 + FL costs for relatively high-cost regions. However, this recommendation was not included in the Swaminathan Commission’s recommendations.
- In the first volume of its fifth report, the National Commission on Farmers (NCF) recommended that the Minimum Support Price (MSP) should be the minimum procurement price for both the Government and private traders.
- The Government’s purchase price should be the MSP plus any cost escalation since the MSP’s announcement, which should be reflected in the market price. The Government should procure staple grains for the Public Distribution System (PDS) at the same price that private traders are willing to pay to farmers.
- The Commission suggested that the Commission for Agricultural Costs and Prices (CACP) should be an autonomous statutory organization primarily tasked with recommending remunerative prices for the main agricultural commodities of both dry farming and irrigated areas. The MSP should be at least 50% more than the weighted average cost of production.
- The report also stated that the ‘net take home income’ of farmers should be comparable to that of civil servants.
