Indian farmers reject support price contract offered by govt

Indian farmers reject support price contract offered by govt


Farm analysts say New Delhi has completely sidestepped the demands

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AMBALA (Reuters) – The protesting Indian farmers' unions have rejected five-year contracts for minimum support prices (MSPs) proposed by the Indian government, one of their leaders said in a video posted on social media platform X on Monday.

The Indian government has offered guaranteed support prices for pulses, corn and cotton in a bid to break a deadlock with protesting farmers, Trade Minister Piyush Goyal said on Sunday after week-long clashes between security forces and protesters.

Tear gas and barricades were used to deter the farmers, who form an influential voting bloc, months ahead of a general election due by May, in which Prime Minister Narendra Modi seeks a record third term.

Goyal's comments followed marathon talks with farmers' unions after the protesters, who are demanding higher prices backed by law for nearly two dozen crops, were halted at a distance of about 200 kilometres from New Delhi.

Goyal said the government had proposed five-year contracts for MSPs to farmers who diversify their crops to grow cotton, pigeon peas, black matpe, red lentils and corn, paid by cooperative groups it promotes.

"These organisations will buy the produce and there will be no limit on quantity," Goyal told reporters in the northern city of Chandigarh, adding that a similar price guarantee would also be offered to farmers who diversify and produce cotton.

The farmers' unions had said they would decide on the proposal within a day or two, after reaching consensus among themselves. But Jagjit Singh Dallewal - one of their leaders - said in a video shared by Reuters partner ANI that the unions had rejected the proposal.

Read more: Why are Indian farmers protesting again? Demands for government explained

Farm analysts said the government has completely sidestepped the demands of farmers.

"The government should have at least addressed one of the main demands of a legal guarantee for MSPs," said Devinder Sharma, an independent food and trade policy analyst.

The government's proposed solutions diverge significantly from what the farmers have been advocating for, indicating a lack of seriousness on the government's part regarding the whole issue, Sharma added.

Switching more crops to pulses from rice and wheat that require more water will not only benefit a depleting water table but help cut back on imports of pulses.

The world's biggest importer of pulses, India has struggled to hold back increases in the prices of pigeon peas and black matpe.

Domestic corn demand has also been rising as the poultry and ethanol industries boost consumption.

Police have used tear gas and barricades to stop thousands of farmers, who mainly grow wheat and rice, from marching to New Delhi, to press their demand that the government ensures a minimum price for all their produce.

The government announces support prices for more than 20 crops each year to set a benchmark, but state agencies primarily buy rice and wheat at the support level, benefiting around just 7 per cent of farmers who raise those crops.