EXPLAINED: What is the C2+50% formula on Swaminathan Commission's MSP that farmers are protesting for

Swaminathan Commission's C2+50% formula on MSP gives farmers an additional 50% of their crop costs.

Farmers' Protest: Key Kisan Demands Remain Unresolved!

New Delhi: Nearly two years after farmers from Punjab, Haryana and western Uttar Pradesh first surrounded Delhi, the city's borders are once again the scene of demonstrations. The farmers of the same area are back for a second round of protests, once again disrupting the smooth flow of city life. Notably, however, the latest 'Chalo Delhi' march witnesses a smaller crowd and has slightly changed the demands than the previous protests in 2020-2021. Let us understand the root cause and key discussion points during Farmers Protests 2.0.

Main demand of protesting farmers

The main demand of protesting farmers this time is a legal guarantee of minimum support price (MSP) for all Kharif and Rabi crops, besides demanding a pension of Rs 10,000 for farmers aged 60 years and above. An MSP for Kharif and Rabi crops would mean the government fixing a fixed price so that farmers get a 'fixed' income irrespective of the quantity and quality of their harvest.

Farmers have every right to seek 'government shield', but MSP for every crop is not feasible, sustainable and justified, not only politically but also economically. Firstly, talking about the economic impact, there has been a wide gap between farmers' demand and the government's MSP allocation for years.

What is the Swaminathan Commission and what did it recommend?

Then Prime Minister Manmohan Singh formed a committee under the chairmanship of renowned agricultural scientist MS Swaminathan in November 2004 to study the problems of farmers, which was named 'National Commission for Farmers'. The committee submitted six reports to the government from December 2004 to October 2006.

What is the C2+50% formula on MSP?

The C2+50% formula on MSP is an idea of the Swaminathan Committee to give farmers an additional 50% of their crop costs, thereby increasing their income. In the current protests, the protesting farmers are calling on the authorities to reflect this formula in the MSP Guarantee Act. Notably, Congress leader Rahul Gandhi has said that if the Congress wins the upcoming 2024 elections, it will give legal status to the MSP.

Status check of MSP and market value

In fiscal 2020, the market value of agricultural products was Rs 10 lakh crore and this included all 24 crops under MSP purview. However, the total MSP procurement in that year was Rs 2.5 lakh crore, which is only 25 percent of the products under MSP.

If the government were to relinquish farmers' demand for legislation, in line with its guarantee, the exchequer could bleed with additional expenditure of at least Rs 10 lakh crore per year. Notably, this amount is almost equal to the central government's allocation of Rs 11.11 lakh crore in this year's interim budget for infrastructure development, according to a report by news agency IANS.

(With input from agencies)