Farm laws and ‘taxation’ of farmers

16 Feb Farm laws and ‘taxation’ of farmers

• • farm laws are necessary to end the net taxation of agriculture as propounded by some scholars.
  • How farm laws will benefit:
    • farm laws would weaken restrictive trade 
    • marketing policies in India 
    • Farmers will get the markets right which further benefit private trade.
  • There is no Minimum Support Price (MSP) in milk -> and a substantial share of milk sales takes place through the private sector which also includes multinationals like Nestle and Hatsun. 

• If without MSP, the milk sector can grow with the help of  private corporations then why not other agricultural commodities? 

•  A recent case study found that Producer Support Estimate (PSE) in Indian agriculture was -6% between 2014-15 and 2016-17. 

• OECD defines PSE as “It is nothing but the annual monetary value of gross transfers from consumers and people who pay tax to agricultural producers, measured at the farm gate level, arising from policies that support agriculture.

• • The market price support (MPS) for a commodity is nothing but the product of its annual production and the difference between is international and domestic prices. 
  • So the argument is,  MPS is negative for the agriculture commodities in India but it is positive in OECD countries because of private sector participation. But the same argument gets foil when we see the milk sector. MPS is negative for the milk sector too despite private sector participation. So we can say that, Net taxation burden is also carried by Milk producers.

(The hindu)

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Swarn Singh

Plutus IAS Current Affair Team Member