A bench of Chief Justice Surya Kant and Justice Joymalya Bagchi agreed to hear the plea and issued notices to the Centre, Directorate General of Foreign Trade and the Commission for Agricultural Costs and Prices, seeking their response on the plea.
Advocate Prashant Bhushan, appearing for the petitioners, said the plea raises a very important issue related to the farmers in the country.
“Indian farmers are facing a terrible financial crisis because of being unable to sell their produce even at their actual cost of production. This has led to large scale suicides of farmers with over seventeen thousand farmers having committed suicide in Maharashtra alone in the last 5 years,” the plea said.
During the arguments, Bhushan said the MSP was often fixed below the actual cost of cultivation.
The bench observed that a lot of mathematical formulas were being cited in the petition and difficulty may arise in case of cost of land and capital which may vary from state to state.
Bhushan said the calculations were made by the government itself. “You are asking us to re-write the economic policy,” the bench observed.
It said probably, there can’t be a uniform policy for all as there are farmers with big chunk of land also.
The bench, however, agreed to hear the plea and issued notice on it.
It said the government and its institutions calculate the cost of production of different agricultural products state by state.
“The MS Swaminathan Commission Report in 2006 had recommended that the farmers should be paid their cost + 50 percent profit to make farming viable in the country,” the plea said, adding that this recommendation has never been questioned by the government.
It said the MSP being fixed by the government year by year and crop by crop was considerably less than the weighted average cost of production.
“For some crops, especially wheat and rice, the government is virtually the monopoly purchaser since it is distributing these agricultural produce under the Food Security Act at highly subsidised prices, virtually free of cost, to the people,” it said.
It also said the provision of free wheat and rice under the Food Security Act to roughly two-third of the population has also resulted in artificially depressing the demand for other competing food crops, particularly millets, which are not being purchased by people because of the availability of virtually free rations of wheat and rice.
“Adding to this already acute distress is the newly concluded trade deal between India and the US by which most agricultural products are allowed to be imported into India from the US virtually free of any import duty,” the plea said.
It has sought direction to the authorities to ensure complete procurement of notified crops under the MSP calculated on the basis of the exact cost of cultivation.
The plea has also requested for direction to establish effective, accessible and functional procurement centres at every tehsil, block, village, and district across the country, and to put in place a transparent and uniform procurement mechanism ensuring assured procurement of all crops notified under the MSP regime, without confining effective procurement only to select crops or regions.
The petitioners have also prayed to the court to issue direction to the states and Union territories to waive all outstanding agricultural loans of farmers, in view of the alleged continuing failure of the MSP framework to ensure recovery of cost of cultivation and the resultant agrarian distress.