Among the multiple promises spun by opposition parties ahead of assembly elections in the central Indian state of Chhattisgarh, the one about raising the minimum support price (MSP) for rice crops has most rekindled hopes among the farming community.

Congress party President Rahul Gandhi focused on farmers’ issues while campaigning across the state, promising to increase the MSP of paddy/rice crops to 2,500 rupees (US$37) per 100kg (commonly known as a “quintal”).

The state went to the polls in two phases, on November 12 and 20.

Former Chief Minister Ajit Jogi, whose Janata Congress Chhattisgarh (JCC) party has contested its first state elections, also pledged to hike the MSP of paddy crops up to 2,600 rupees/100kg in his manifesto. Even the Aam Aadmi Party (AAP), contesting its first assembly polls in Chhattisgarh, promised to hike the MSP to the same level.

“Five years ago, the Bhartiya Janta Party (BJP) had promised to hike MSP of paddy crops to 2,100 per quintal (100kg). But they never fulfilled this promise. We have faith that the new government will give 2,500 rupees per quintal as they have promised. Nobody is selling rice in our village,” says Roshan Tarak, 36, a farmer from Chandi, Abhanpur administrative area in the state.

Chandrashekhar Shukla, President of Kisan Congress, believes it is a farmer’s right to decide when they want to sell their crops. He said, “The farmers have taken token from purchase centers, but are not selling their crops. Festivals of Dussehra and Diwali have also passed. Clearly, the farmers are not in a hurry to sell their rice.”

“Farmers not in distress’’

Brijmohan Agrawal, agriculture Minister in the incumbent BJP government, denies that rice farmers in Chhattisgarh are in distress. “In comparison to (the) first three years (after the state was formed), in 15 years of BJP rule, more than four times (rice) has been bought from farmers, while they were paid nine times more.

Over the last 15 years, 75.3 million metric tonnes of (rice) has been purchased from farmers and they have been paid 951.36 billion rupees ($13 billion) out of which 97.12 billion rupees has been paid as bonus.”

However, Jeevanlal Bhardwaj, member of the State Policy Commission and an economist, views things differently. He says the share of farming and allied sectors in 2004-05, a year after Raman Singh took charge as Chhattisgarh Chief Minister, was 21.2 % in the GDP, but dwindled down to 15.2 % in 2016-17. “This is enough to (tell us about) the condition of farming in Chhattisgarh,” Bhardwaj said.

MSP trends

Political parties follow a trend in setting MSPs for various crops. The periods before elections witness higher raises in MSPs than any other time.

However, before the 2013 assembly elections, the Raman Singh-led BJP government promised a 100% hike, but could only add a minimal 5% hike every year.

This year, a 200 rupees/quintal ($3) raise was announced in July, taking the MSP up to 1,750 rupees per quintal ($25). The state government also added a bonus of 300 rupees per quintal ($4), which it said would be deposited directly in farmers’ bank accounts along with the price.

But, the government’s extended selling process does not provide much motivation for farmers, says Rupan Chandrakar, 65, a farmer from Parsada, another village in Abhanpur area. “Farmers sold (their rice), but were not paid bonuses for three years,” he said, adding that now that elections are due, farmers have been paid bonuses for 2017-18.

Districts like Raipur, Durg, Dhamtari, Mahasamund, Janjgir-Champa, Raigarh and Bilaspur have the highest land area for rice cultivation. Politically significant, these districts encompass 39 of the state’s 90 assembly constituencies, hence appeasing paddy farmers has been a major part of election campaigning.

‘Premium rice needs better pricing’

Considered the rice bowl of central India, Chhattisgarh is home to about 4.3 million paddy farmers, who cultivate a rich diversity of more than 23,000 varieties of rice crops.

Dr A K Sarawagi of the Raipur-based Indira Gandhi Krishi Vidyalaya (IGKV), a research and education organisation working to improve the livelihood of farmers, said, “The MSP is decided based on grain-type and there is a slight difference between the prices of fine grain and coarse grain.” However, since the government does not purchase premium (rice) in the state, it does not have a fixed selling rate, and in turn, farmers produce less of these varieties.

Talking about what the next government in Chhattisgarh can do for paddy farmers, Sarawagi said the ensuing government can develop a state policy to procure premium rice at better prices.

He said, “Farmers in the state have been saying that the rates of premium varieties should be fixed according to the superior grain quality. Like Basmati provides them high return in market, the state can also devise a better MSP for premium quality rice.”

Rajesh Chandravanshi, Joint Director of the agriculture department with the Chhattisgarh government, said that the government procures around 70% of seasonal rice crops. While 6 million metric tonnes was procured last year, the target this year is to purchase 7.5 million metric tonnes. Chandravanshi further said that farmers do benefit from selling their rice to the government since the rate is higher than the market price.

The MSP of rice has increased by over 10 times in the last two decades, which has led to private grain markets suffering losses. This has also increased the management cost of the Food Corporation of India (FCI) which procures, stores and distributes the grains. Often, the reserve grains with FCI have been more than the required buffer stock resulting in higher storage costs and inflated subsidies.

If the past is any indication then it is evident that procurement is generally beneficial to farmers working medium to high areas of land, of at least five acres (2 hectares) or more.

The government procures a maximum of 15 quintal (1,500kg) from a farmer, and those with higher yields distribute the produce among family members or give out portions of it as remuneration to landless laborers who work their fields.

While the incomes of farmers with large land holdings can be huge, those with marginal land are hardly able to cover the cost of production given the loans they have to take out.

As research papers on the MSP and its impact on improving the status of agriculture have pointed out, the government also needs to consider non-price factors such as provision of necessary infrastructure and reduction in operating costs of the FCI to increase its efficiency.

(With additional reporting from K N Kishore and Suneet Shukla)