Supreme Court Seeks Centre’s Response on Plea for Fair MSP Based on Production Costs

The Supreme Court on Monday April 13^th decided to examine a petition saying that the government should pay farmers at least the weighted average of the costs of production of various crops through the declaration of a proper Minimum Support Price (MSP) and the procurement at that rate. “Indian farmers are facing financial crisis as they are unable to sell their produce even at the actual cost of production. This has led to large scale suicide of farmers, nearly 17000 farmers have taken their own lives in Maharashtra in the last five years”, advocates Prashant Bhushan.

The court issued notice to the Centre on the petition which argued that the government and its institutions calculate the cost of production of different agricultural products on a state-by-state basis. This cost is calculated by calculating the actual input costs, the cost of family labour used to produce the crop, the rental value of the owned land, the rent paid for leased land and the interest incurred on the working capital.

The M.S. Swaminathan Commission Report in 2006 had recommended that the farmers should be paid their cost in addition to the 50% profit to make farming viable in the country, said Mr. Bhushan. “The recommendation of the Swaminathan Commission had never been questioned by the government. The MSP is less than the average cost of production for almost all states and certainly less than the weighted average cost. This has led to distress among farmers in the country” the petition said.