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%.
- 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
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
- De-husked coconut
- Sugarcane (Fair and remunerative price)
- Virginia flu cured (VFC) tobacco
Source: The Hindu