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Oil Palm - MSP - Shielding Whom?

Created on 15 September 2021

(Edited Image Courtesy- CACP)

The Modi Government has enriched farm pricing mess by coining two new terms -Viability Price (VP) and Formula price (FP).

These have been contrived to shield edible oil companies from paying minimum support price (MSP) to oil palm (OP) farmers. The difference between VP and FP would be known as viability gap funding (VGF). It would be paid by the Government. It is thus a deemed subsidy for oil mills.

The corporate giants that operate in this business are Adani Wilmar, Patanjali group’s Ruchi Soya and Godrej Agrovet Limited (GAL) and Cargill India.

It is perhaps for first time that concept of VGF has been applied to crop cultivation, OP farming to be precise. This confirms Government’s aversion towards statutory MSP for major crops demanded by farmers. It certainly doesn’t want agro-processing companies to buy farm produce at MSP or at a higher rate under contract farming.

The aversion surfaced from exclusion of the term ‘MSP’ in The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Service Act, 2020 (FEPAPAFSA). This central law overrides States’ contract farming laws/rules. Some of these such as the ones enacted by Rajasthan and Haryana stipulated MSP as the threshold under contract farming.

Would OP plantations be new battle ground between three Central Farm Laws & respective State’s oil palm law (OPL)? At present, each OP state has its own OPL. Such enactment empowers a State Government to regulate cultivation, production, pricing and marketing of OP produce. Each farmer is assigned a specified processor/oil mill to which it is required to sell FFBs at state-determined prices.

Routes to Secure Farmer Incomes

Created on 21 February 2018

The blueprint for Doubling Farmers' Income should incorporate fully at least one of the four ways to enhance farmers' income security. The four options are 1) universal basic income for farmers; Statutory enforceable minimum support prices (MSPs) for all farm produce including fish;3)Transformation of all direct and indirect farm subsidies into direct cash transfers (DCT) into bank accounts of farm families farm households; and 4) contract farming where the contracting entity, be it public or private sector company, supplies quality inputs and agrees to buy entire the produce at a guaranteed price.

An insight:

Inertia at the Time of Crisis

Created on 04 July 2015

Agrarian crisis has been an integral feature of Indian farming, politics and governance for many decades. Political resolutions affirming commitment to the cause of farmers, rosy promises to growers in political manifestos, rhetorical speeches in Parliament and State assemblies have not eased the agrarian distress across the country, excluding a few regions of robust farming.

The Governments thus come and go. Expert Committees are formed and are forgotten with the Government adopting pick-&-choose approach towards implementing their recommendations. Even setting up of two high-profile Commissions, National Commission on Agriculture (NCA) and National Commission on Farmers (NCF, have not changed the ground reality. In the case of these panels too, the Government adopted piece-meal approach. It avoided going the whole hog in developing a total package to improve agricultural and other incomes earned by farmers.

A comprehensive analysis of major factors underlying the crisis and a multi-facet strategy to resolve it has been penned by me in a article contributed to Farmers Forum Magazine June-July 2015 issue. Here is the article. PDF Continue reading

Kalpakkam fast breeder reactor braces for start-up amidst bureaucratic maze

Created on 01 January 2014

Bureaucratic rigmarole has cast its shadow over the country’s Prototype Fast Breeder Reactor (PFBR) of 500 MW rating, which is at an advanced stage of construction at Kalpakkam in Tamil Nadu.

The project is slated to attain criticality in September 2014. It is expected to start commercial operation by March, 2015. When everything appears to be going right for this strategic project, the Ministry of Environment and Forest (MOEF) has entangled Department of Atomic Energy (DAE) in a procedural hassle.

An MOEF committee has decided that it would not consider extending the validity of lapsed environment clearance for the project till DAE transfers the expired approval in the name of project developer named Bharatiya Nabhikiya Vidyut Nigam Limited (BHAVINI). The validity of the approval dated 17th April 2003 expired about five years back! DAE/BHAVINI, however, applied for extension of the validity in April 2013.