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Government announces hike in MSP for Kharif season

  • IASbaba
  • June 10, 2022
  • 0
Agriculture
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In News: The Union Cabinet hiked the minimum support price (MSP) for 2022-23 Kharif season. The rates for 14 Kharif crops have been increased, the hikes ranging from 4% to 8%.

MSP

  • The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
  • The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
  • CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.
  • The mandated crops include 14 crops of the kharif season, 6 rabi crops and 2 other commercial crops.
  • In addition, the MSPs of toria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively.

Factors for Recommending the MSP:

The CACP considers various factors while recommending the MSP for a commodity, it considers following factors

  • Cost of production
  • Changes in input prices
  • Input-output price parity
  • Trends in market prices
  • Demand and supply
  • Inter-crop price parity
  • Effect on industrial cost structure
  • Effect on cost of living
  • Effect on general price level
  • International price situation
  • Parity between prices paid and prices received by the farmers
  • Effect on issue prices and implications for subsidy

Crops covered

The list of crops is as follows.

  • Cereals (7) – paddy, wheat, barley, jowar, bajra, maize and ragi
  • Pulses (5) – gram, arhar/tur, moong, urad and lentil
  • Oilseeds (8) – groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseed
  • Raw cotton
  • Raw jute
  • Copra
  • De-husked coconut
  • Sugarcane (Fair and remunerative price)
  • Virginia flu cured (VFC) tobacco

Source: The Hindu

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