Punjab’s farmers need a price stabilisation mechanism to move away from paddy 

The paddy farmers of Punjab have been watching the fluctuation in prices of potato seeds, kinoo and vegetables. (File image)

It is heartening that the Union Government has finally decided to negotiate with the Punjab farmers who have been agitating under the leadership of Jagjit Singh Dallewal who was on an indefinite fast since November 26, 2024. It is a good change of stance from leaving it to Supreme Court to issue directions. It would have been tragic if  Dallewal had passed away because of ‘intransigence’ of the Union Government in holding talks with agitating unions. The Government may have done well to realise that dialogue is the only sensible way in a democracy and every agitation (and even genocidal wars!) finally results in negotiated settlement.

A recap

It must be recalled that in September 2020, three farm laws were enacted by the Parliament, leading to year-long protests by farmers of various states demanding their withdrawal. On Guru Nanak Jayanti (November 19, 2021), Prime Minister Narendra Modi in his address to the nation, announced repeal of the three laws. He also announced that a committee will be set up to deliberate on issues relating to minimum support price (MSP).

However, it took the Government eight months (notified on July 12, 2022) to set up the promised Committee under the chairmanship of Sanjay Agarwal, former Union Secretary, Department of Agriculture and Farmers Welfare, who was in office while the farmers agitation took place from November 2020 to January 2021. The Committee has 29 members. It was to include three members of Sanyukta Kisan Morcha (SKM) but SKM has not nominated anyone. The Committee’s mandate was to make suggestions to make MSP more effective and transparent. It was also expected to recommend a strategy for crop diversification to take farmers out of wheat and rice cycles. Mapping of cropping patterns of producers was another important task of the committee.

It was also to suggest strengthening of agricultural marketing system to meet the changing requirements of the country so that the farmers receive remunerative value of their produce.

By the end of July 2024, the Committee had held six meetings. Various sub-committees had held 35 meeting by then.

Despite having substantial intellectual capital, the Committee has not submitted even an interim report in the last two-and-a-half years.

Punjab farmers are aware current paddy pattern is unsustainable

In my view, the present agitation of farmers, mostly from Punjab, is due to realisation that cultivation of paddy in its present form cannot go on for ever. Punjab farmers know that they have to irrigate paddy fields 20-25 times while other crops may be requiring only 4-5 irrigations. They end up spending more money year after year in boring even deeper tubewells.

The Central Ground Water Board (CGWB) compares ground water levels four times a year - April/May, August, November and January. Data collected in November 2023 was compared with decadal mean level of water from 2013 to 2022. It showed that 65.34 percent of wells had registered a fall in level of underground water level while 34.66 percent had shown a rise. Punjab extracts 28 billion cubic metres (bcm) of groundwater every year but its annual recharge is only 19 bcm.

Agricultural output reflects diversity

It is not that Punjab farmers have no experience of diversification. Potato is a major vegetable crop cultivated on more than 1.17 lakh hectares. In 2023-24, it produced 32.38 lakhs tonnes, most of it was for seed production. Similarly, a substantial number of farmers have experience of growing  vegetables and kinoo. The paddy farmers of Punjab have been watching the fluctuation in prices of potato seeds, kinoo and vegetables. They have also been noting the downward spiral in prices of soybean in Madhya Pradesh and Maharashtra where they have been forced to sell soybean at about Rs 4,100 – 4200 per quintal while the MSP is Rs 4,892 per quintal. In addition, the announcement of bonus of Rs 900 per quintal on paddy in MP, Chhatisgarh and Odisha would not have been lost on them as in Punjab and Haryana, they get only the MSP for their paddy.

Since they are used to selling their entire produce of non-basmati paddy to Government agencies at MSP, they want a similar dispensation for other crops. Several times in the last decade, the paddy crop was damaged due to various reasons, but almost entire mandi arrivals were still procured by the Government as the specifications of paddy were relaxed by the Union Government under lot of pressure from the State Government.

Maize, an alternative that hasn’t taken root

For several years, maize has been offered as an alternative to paddy in Kharif. Due to an attractive price of ethanol manufactured from maize, Punjab farmers saw an opportunity to diversify from paddy. However, in the absence of an assurance that they will get MSP for entire maize production, the farmers are not assured of stable and remunerative income from maize.

Smoothening price volatility is essential

While the demand for a legal right to realise MSP for all the crops for which it is declared by the Union Government may be hard to accept in a hurry, it may be a good idea to explore other means to reduce fluctuation in prices of major crops, including even those crops in which India is a net importer. This will help not only the farmers of not only the MSP but also the farmers of fruits and vegetables which are more prone to price fluctuations, vagaries of weather and are grown mostly by small and marginal farmers.

The Committee formed by the Government can surely give its suggestions to the Government for reducing volatility and maintaining remunerative prices.