MSP Panel

In News: The Centre has constituted a committee to look into the issues of minimum support price (MSP).

Ministry of Agriculture and Farmers Welfare issued a notification stating:

• A committee will be constituted to promote Zero budget based farming, to change crop pattern keeping in mind the changing needs of the country, and to make MSP more effective and transparent
• The committee will consist of representatives of the Central Government and State Governments, Farmers, Agricultural Scientists and Agricultural Economists.”
• The committee, headed by former Agriculture Secretary Sanjay Agrawal, has 26 members including farmer representatives.

The committee will provide suggestions/measures

• To make available MSP to farmers of the country by making the system more effective and transparent and will also give suggestions to give more autonomy to Commission for Agricultural Costs and Prices (CACP) and measures to make it more scientific.
• To strengthen the Agricultural Marketing System as per the changing requirements of the country to ensure higher value to the farmers through remunerative prices of their produce by taking advantage of the domestic and export opportunities.
• On 5 points regarding natural farming including suggestions for programmes and schemes for value chain development, protocol validation & research for future needs and support for area expansion under the Indian Natural Farming System by publicity and through involvement and contribution of farmer organizations.
• On 4 points related to crop diversification including
• mapping of existing cropping patterns of agro-ecological zones of producer and consumer states;
• strategy for diversification policy to change the cropping pattern according to the changing needs of the country;
• arrangement for agricultural diversification & system to ensure remunerative prices for the sale of new crops; review and suggestion on micro irrigation scheme.

Minimum Support Price (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: Indian Express

The Hindu

Previous Year Question

Q.1) Consider the following: (2018)

1. Areca nut
2. Barley
3. Coffee
4. Finger millet
5. Groundnut
6. Sesamum
7. Turmeric

The Cabinet Committee on Economic Affairs has announced the Minimum Support Price for which of the above?

1. 1, 2, 3 and 7 only
2. 2, 4, 5 and 6 only
3. 1, 3, 4, 5 and 6 only
4. 1, 2, 3, 4, 5, 6 and 7