Prepare IAS Coaching
Current Affairs
Title : Minimum Support Price: Key Demand of farmers
Date : Nov 24, 2021
Description :
GS III
Topic à Agriculture related topics
- What is MSP, exactly:
- The government purchases grains from farmers at the minimum support price (MSP). MSPs have already been established for 23 crops grown during the Kharif and Rabi seasons.
- What is the method for calculating it:
- The MSP is the price at which the government buys crops from farmers, and it is estimated at least 1.5 times the producers' cost of production.
- According to the Union Budget for 2018-19, MSP would be retained at 1.5 times the cost of production.
- The MSP is determined twice a year, based on recommendations from the Commission for Agricultural Costs and Prices (CACP), a governmental body that issues reports for the kharif and rabi seasons.
- Which manufacturing costs are taken into account while establishing MSP:
- The CACP includes both 'A2+FL' and 'C2' expenses when recommending MSP.
- All monetary and in-kind expenses incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel, and irrigation, among other things, are included in A2 expenditures.
- On top of A2+FL, C2 expenditures account for the rent and interest foregone on owned land and fixed capital assets, respectively.
- The MSP's disadvantages include:
- • The main concern with the MSP is a paucity of government procurement machinery for all products except wheat and rice, which are actively procured under the PDS by the Food Corporation of India.
- Farmers in states where the grain is completely procured by the government benefit the most, while those in states where the grain is procured less frequently are frequently affected.