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Reforms Necessary But Govt Must Offer High MSPs for Crops Other Than Just Paddy: Nobel Winner Abhijit Banerjee

File photo of Nobel laureate Abhijit Banerjee.

File photo of Nobel laureate Abhijit Banerjee.

Thousands of farmers, mostly from Punjab and Haryana, are protesting at various borders adjoining Delhi against the laws, fearful that these will leave them at the mercy of big corporates by weakening the MSP and mandi systems.

Sujit Nath

As farmers continue a long protest against the government's agricultural reforms in the national capital, Nobel laureate and economist Abhijit Banerjee says the sector needs reforms but adds that the government should offer more transparent and 'lucrative' Minimum Support Price system for other sustainable crops as well besides just paddy crops.

Paddy production in Punjab is draining the water table and estimates suggest the state will run out of water in 20 years, he tells News18.com. “High MSPs for paddy are a big part of the reason why we have this problem, and we will have to do something about it," he says.

Banerjee feels that providing equally lucrative MSPs for other sustainable crops could be a solution. "But that does not seem to be on the table,” he says.

The writing on the wall, Banerjee says, is that because of the agri reforms, selling crops at the MSP will become less profitable. "That will create some losers and winners. The government could just acknowledge it and try to compensate the losers,” he adds.

Thousands of farmers, mostly from Punjab and Haryana, are protesting at various borders adjoining Delhi against the laws, fearful that these will leave them at the mercy of big corporates by weakening the MSP and mandi systems. The government maintains the laws are aimed at helping farmers and increasing their income.

After a deadlock of more than a month, the government and farm unions reached some common ground on Wednesday. But the two sides are yet to reach an agreement on the demands to repeal the laws and legislate a legal guarantee for MSP.

After the meeting, agriculture minister Narendra Singh Tomar said the government had repeatedly said it was ready to give the farmers a written assurance.

Banerjee, however, says keeping the MSP system unchanged is not the solution either. "The government insists the current MSP regime will continue unchanged, but then the prices of rice and wheat will remain so high, corporates will have no incentive to enter the markets," he explains. This, he says, will make the entire business of allowing corporates in the market moot.

“In that case the government could as well leave rice and wheat out of the reform. So you can see why farmers are having trouble believing that nothing will change with the MSP, and are fighting for more transparency,” he adds.

The next meeting between the government and farmer unions is scheduled for January 4. The unions on Friday warned they will start shutting all malls and petrol pumps in Haryana if the government fails to resolve their main demands on the day of the talks.


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