Government announces hike in MSP for Kharif season

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