Let farmers claim MSP as a legal right, suggests Punjab and Haryana High Court

[dropcap]T[/dropcap]HE Punjab and Haryana High Court has recommended that farmers be given a legal right to claim Minimum Support Price (MSP), and directed Central and State Government to formulate a legislation to boost farmers’ income.

A two-judge bench of Justices Sanjiv Sharma and Harinder Singh Sandhu said in a recent judgment thatthe Minimum Support Price had, to some extent, redressed the grievance of farmers but as a mere declaration it had no legal force. “The farmers must be given a legal right to claim the MSP without any hindrance. The Union of India and State Government may, in their own wisdom, legislate to give legal status to the MSP to boost the farmers’ income,” the court suggested.

“… the Minimum Support Price should be three times above the cost of production of major crops including fruits and vegetables to save the farmers from distress and also to procure food grains for public distribution considering the cost including actual expenses in cash and kind, the loan on lease land, impeding the cost of labour, own capital assets, interest on valuable capital etc,” the Punjab and Haryana High Court said in its order dated July 29, 2019.

Responding to a batch of petitions against the move by the Punjab State Cooperative Agriculture Development Bank Ltd, Chandigarh, to discontinue a pension scheme citing lack of funds owning to loan waivers, the court asked the state government to consider formulating a scheme:


  1. for payment of reasonable compensation or family pension to the families of farmers who have committed suicide, and
  2. for providing insurance cover, including weather insurance to the farmers for their crops in consultation with the National Insurance Companies along with stakeholders at minimal premium.


It also suggested that the Reserve Bank of India work in concert with banks, state governments and other stakeholders on the manner in which agricultural loans are advanced and their recovery or waiver in the eventuality of suicide by a farmer.

The court said that farmers have taken loan at exorbitant rates of interest and were forced to sell their crops under distress because there were regular chain of warehouses to store the produce. If the state government builds a sufficient number of warehouses, farmers can store their crops in the warehouse and sell them subsequently at a remunerative price.

“The Parliament has enacted the Warehousing (Development and Regulation) Act, 2007 but the same has not been implemented in letter and spirit,” the court pointed out.


Read the Judgement here:


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