People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 29

July 18, 2010

RABI SEASON 2010-2011


Kisan Sabha Demands Remunerative Crop Prices


THROUGH a statement issued from New Delhi, June 26, All India Kisan Sabha’s president S Ramachandran Pillai and general secretary K Varadha Rajan have given the information that the AIKS argued for remunerative prices and placed its proposals for the fixation of minimum support prices (MSP) of rabi crops at a meeting held by the Commission on Agricultural Costs and Prices (CACP) on June 25 as part of the deliberations for the purpose.


The statement said the chairperson of the CACP had assured to look into the AIKS proposal about arriving at a consensus on calculation of the cost of cultivation and has agreed to recommend to the agriculture ministry that it must have a consultation with the state governments, experts and peasant organisations for setting at rest the discrepancies in cost calculations. The chairperson has also assured that the specific demands of the AIKS on problems of the coconut growers, including the need for procurement of green coconut, rejection of copra by the National Agricultural and Cooperative Marketing Federation (NAFED), citing the moisture content and the MSP proposed for ball and milling copra, would also form part of its recommendations.


The AIKS expressed serious concern at the extraordinary situation arising out of the decontrol of fertiliser prices under the nutrient based subsidy (NBS) system and the exorbitant hike in prices of DAP, MOP and other fertilisers. In the context of the exorbitant fertiliser and fuel prices, the Kisan Sabha argued that these factors should be taken into account while fixing the MSP for the rabi crops.


On this occasion, the AIKS also condemned the unjust hike in fuel prices and demanded immediate rollback of the decision as this is bound to further burden the masses and the peasantry who are already reeling under the spiralling prices of essential commodities as well as agricultural inputs.

The AIKS proposals and specific suggestions on the MSP for rabi crops, submitted to the CACP, also carried a detailed comparison of fertiliser subsidies under the NBS regime with those in 2008-09. The AIKS statement said the demands of the farmers for remunerative prices have been consistently disregarded by the government. The government’s assertion while announcing the MSP for kharif crops --- that some of the prices fixed were even higher than the CACP recommendations --- put a question mark on its reputation and gave an impression that such exercises were futile. The efficacy of a purely advisory body like the CACP and exercises like the present consultation would be questioned by farmers if such incidents recur. It is imperative upon the CACP to dispel doubts and come up with realistic pricing that will provide farmers with the incentive and the investible surplus to carry on with cultivation.


As for the MSP for rabi crops in 2010-11, the All India Kisan Sabha has made the following submissions.


1) The recommendations made by the CACP must be based on the cost of cultivation, which has to be calculated on the basis of the variable and fixed costs of cultivation. The variable costs include costs of human and machine labour, seeds, fertilisers, irrigation, pesticide, insecticide and weedicide. Similarly, the calculation of fixed costs must comprise of rent of land owned, rent paid for leased land, land taxes and cesses, depreciation on implements and farm building and other miscellaneous items.


2) The AIKS has pointed out that the forthcoming rabi will witness for the first time the deleterious impact of the NBS regime in fertilisers and the decontrol of prices of DAP, MOP and other fertilisers. The price of urea has also been increased by 10 percent to Rs 5310 per metric tonne. The subsidy for DAP has been fixed at Rs 16268 per metric tonne while the current prices will be around Rs 25,000 per metric tonne even if the conservative price of 500 dollars per metric tonne is taken as the international price. For MOP it has been fixed at Rs 14692 per metric tonne (In August 2008 DAP prices had gone up to around Rs 60,000 per metric tonne.) With import price parity and fertiliser companies determining the farm-gate prices, farmers are going to be entirely at the mercy of profit-seeking fertiliser cartels. For DAP, the new MRP (excluding local taxes) would work out to Rs 9,950 a tonne, which is 6.4 per cent more than the existing Rs 9,350. The MOP rates have gone up from Rs 4,455 to Rs 5,055 a tonne, translating into an even higher 13.5 per cent rise. Already prices of DAP in the domestic market have risen to over Rs.11,100 per metric tonne according to available information. Referring to its comparison of fertiliser subsidies over 2008-09 and those in 2010-11 under the NBS regime, the AIKS said the volatile oil prices and increase in prices of petrol and diesel is also an added burden on the farmers. The CACP will have to keep note of this extraordinary situation in fertiliser prices as well as fuel prices other than the increase in costs of other inputs while determining MSP.


3) Further, erratic monsoon and the delay in rains may lead to a reduction in acreage and a contingency plan will have to be put in place to generate confidence among the farmers. Interest free loans, subsidised diesel, provision of rent-free pumpsets and tractors through the panchayats to encourage group cultivation, and supply of quality inputs at affordable rates must be ensured to deal with any such eventuality. The use of Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) to subsidise the labour costs for the poor small and marginal farmers should be considered in such a manner that farmers as well as agricultural workers benefit. The centre should bear a part of the labour costs.


4) The AIKS has demanded that the government must strengthen the public extension services and reinstate them wherever they have been dismantled. The move of the government to let the multinationals (MNCs) to take over the extension work is a dangerous one and has to be withdrawn forthwith. (The Rajasthan government’s rabi programme envisages such a role for the Pepsico, Cargill, Monsanto, Mahyco, Sab Miller and others. PPP based implementation of the extension programme in collaboration with the ITC is also in the pipeline.)


5) Taking a view of the huge increases in input costs, one finds that the MSP of wheat in 2009-10, fixed at merely Rs 1,100 per quintal, represented an increase of a paltry Rs 20 or 1.86 per cent over the 2008-09 MSP. This was as opposed to the AIKS proposal of Rs 1500 per quintal last year. It is to be noted that, at Tuticorin port, the landing cost of imported wheat from Australia is Rs 1105.20 per quintal, excluding other charges. Similarly, the landing cost of imported wheat from the US at Indian ports is Rs 1,222.70 per quintal, excluding other charges. In the light of these facts and the increase in the input costs, the AIKS has demanded that the MSP for wheat for 2010-11 must be fixed at Rs 1,700 per quintal.


6) In the case of sugarcane, the AIKS had demanded an MSP of Rs 300 per quintal and the government fixed it as Rs 125 per quintal. Subsequently, it was increased to Rs 129.84 under a flawed “fair and remunerative price” system. In the case of jute, the farmers have been pushed into dire straits by its low MSP announced over time. In the case of copra too, hit by the India-ASEAN free trade agreement (FTA), import of palm oil and mite infestation, farmers are facing extreme distress. The Kerala government has also come forward to procure green coconut at Rs 12 per nut. The AIKS demand is that the centre must evolve a policy to support such moves and procure it as a new item at Rs 15 per nut. Procurement by the NAFED involves various stipulations which, in effect, nullify any benefit whatsoever of the MSP announced. The stipulation of a fixed 6 per cent moisture content in copra is unscientific and must be reconsidered. Such anomalies have to be corrected and quantitative restrictions must be reinstated to curtail the import of cheap substitutes. Special assistance to fight the mite menace and for phased removal of senile palms having low productivity must be ensured.


7) The MSPs of mustard and rapeseed as well as masur (lentil) were not increased even by a single rupee when compared to the 2008-09 MSPs. This has been a gross injustice to the farmers who cultivate these crops in semi-arid conditions with high risk. This is even as the market rates are many times higher and middlemen and traders are raking in huge profits. These middlemen and big traders control the dynamics of the local mandis, making it impossible for the farmers to get a fair deal. There has to be stringent regulation of activities of such elements.


8) Provision of gypsum as a source of nutrient in rabi oilseeds and pulses as part of a National Soil Amelioration and Replenishment Programme must be ensured at subsidised rates. Similarly, the inputs and technology to correct acidity, alkalinity and salinity as well as drip irrigation mechanism at affordable rates to ensure better water management where possible must also be provided. Use of the MGNREGA to develop bio-fertilisers in a scientific manner must be considered.


9) Minor forest produce must be procured at remunerative prices from the tribal people as it is their main source of livelihood, and avenues for value addition must be ensured. Compensation for losses in income due to natural calamities like floods or droughts must be ensured.



AIKS Proposals for MSP of Rabi Crops



MSP Approved For 2009-10 (Rs/Qtl)






MSP Proposed by AIKS For










Rabi Crops
















Lentil (Masur)























Other Crops

Jute (TD5)





Jute (TD4)










Copra (Ball)





Copra (Milling)









Subsidy of Fertilisers under NBS in Comparison with 2008-09




2008-09 (Minimum)

2008-09 (Maximum)

2010-11 (NBS)

Di-ammonium Phosphate (DAP)




Mono- ammonium Phosphate (MAP)




Triple Super Phosphate (TSP)




Muriate of Potash (MOP)




Ammonium Sulphate

-- 3917



Complex Fertilisers




































Source: Fertiliser Statistics, 2008-09, Fertiliser Association of India, November 2009, pp 1-187 to 1-188 Ministry of Chemicals and Fertilisers, Government of India,

Note: Complex fertilisers indicate the combination for nitrogen (N), phosphorous (P), potassium (K) and sulphur (S). For each fertiliser the subsidy (rates of concession) varies across months and across production units/importers, the minimum and maximum are selected from all possibilities. The negative amount for ammonium sulphate for minimum in 2008-09 is as reported.