The minimum support price (MSP) for foodgrains should reflect market prices and farmers selling their stock to the government should be rewarded with incentives like discount cards, the chairman of National Commission on Farmers' M.S. Swaminathan, suggested Monday.

'The MSP should be fixed on the basis of the cost of agriculture inputs, including labour, plus 50 percent and reviewed at harvest time based on escalation in the cost of inputs like diesel and fertilisers to ensure that farmers get a good return on investment,' said Swaminathan during an interaction organised here by the Forum of Financial Writers.

Highlighting the final recommendations of the commission in its report to the government earlier this month, he said it is important that farmers' interests should be looked after to ensure that they are able to make a sustainable living.

The report stresses the need to ensure a 50 percent return on investments in agriculture to farmers, which is considerably less than 200 percent or more that many industries earn on their investment.

The Cabinet Committee on Economic Affairs Monday fixed the minimum support price of wheat at Rs.750 per quintal for the Rabi (winter crop) season, while for mustard it was fixed at Rs.1,715 per quintal as against Rs.1,600 suggested by the Commission on Agricultural Costs and Prices (CACP).

The MSP for barley has been fixed at Rs.565 per quintal, gram at Rs.1,455 per quintal and masur lentils at Rs.1,545 per quintal.

Given that farmers had this year opted to sell their produce to private traders offering better price than the government-fixed MSP, leading to a shortfall in buffer stocks, the agriculture ministry had suggested that the MSP for wheat be fixed at Rs.750 plus bonus for higher wheat procurement.

The CACP had, however, recommended Rs.700 as the MSP.

While welcoming the announcement of the higher MSPs, Swaminathan said they should be periodically reviewed to deliver viable returns to farmers for their efforts.

'There should be a provision to reward farmers who sell their produce to the government to ensure food security. This reward or incentive could be in the form of smart card or discount coupons that would enable him to buy seeds and farm tools at cheaper rates,' he said.

Citing the case of potato growers, the renowned agri-scientist said that while farmers are getting only Rs.20 per quintal, retail consumers are paying around Rs.20 per kg with the middlemen taking the lion's share.

The emerging trend of large supermarket chains could prove a boon to farmers provided they are educated and made aware of market trends as has been noted in southern states like Andhra Pradesh, Tamil Nadu, Karnataka and Kerala, he added.

Swaminathan, however, admitted that the chain stores could also pose a risk to small retailers and farmers who carry their produce to cities for selling, leading to larger displacement and unemployment.

For protecting the rights of farmers and ensuring farm-friendly policy, the commission has recommended making agriculture a concurrent subject to enable state governments to have a greater say.

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