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Agriculture ministry to go ahead with proposal to raise MSP of produce
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Tuesday, 20 February, 2018, 08 : 00 AM [IST]
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Ashwani Maindola, New Delhi
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The agriculture ministry has decided to go ahead with the proposed plan of raising the minimum support price (MSP) of farm produce, and for that, it will discuss the modalities with the state governments as early as March 2018.
The urgency is visible, as the government is yet to formally pass the Budget in Parliament, but wants to roll out the plan within the start of the next fiscal in April 2018, so that when the Kharif season ends by October, the mechanism is put in place to give farmers a better price.
Meanwhile, it was learnt that the government estimated 320 lakh tonne wheat procurement during Rabi Marketing Season 2018-19, while the rice/paddy procurement was estimated at 55 lakh tonne for Rabi crop in Kharif Marketing Season 2017-18.
A meeting was called by the agriculture ministry earlier next month to chalk out the mechanism for the plan to give one-and-a-half times the input cost incurred by a farmer.
Finance minister Arun Jaitley, in his Budget speech earlier this month, had stated that with the agricultural production touching 275 million tonne of foodgrains and 300 million tonne of fruits and vegetables in India, it was proposed to raise the MSP for Kharif crops by 1.5 times the input cost. He said, “This move will be instrumental in doubling the farmers’ incomes.”
“For better price realisation, the farmers need to make decision based on prices likely to be available after harvest. The government will create an institutional mechanism with participation of all concerned ministries, to double the polices, practices for prices and demand forecast, the use of the future market, the expansion of the warehouse depository system, and to take specific decisions about export- and import-related matters,” he added.
“But fixing a mechanism isn’t that simple,” opined experts.
When contacted about the proposal, an official with the Maharashtra State Agriculture Marketing Board (MSAMB) said, “It is good move that the government is coming forward to protect the farmers by giving higher MSPs to their produce.”
“And there is already a system in place wherein the government has set an MSP after processing every detail like the cost of production for every commodity. However, there are times when the set MSPs don’t suit everyone’s requirements,” he added.
“For instance, in Maharashtra, wheat production per hectare yield is not much, and thus the cost of production is higher. However, Madhya Pradesh has a good production of wheat, so the production cost is less,” the official said.
“Thus, the average price set by the government does not suit farmers in Maharashtra. Therefore, the government should not only look at the cost of production factor, but the farmers should get their economic viability,” he added.
And there are models available in the country, wherein states like Madhya Pradesh are giving better prices to the farmers.
The official said, “A recent good example can be followed of Madhya Pradesh. They have launched the Bhavantar Yojana, wherein four commodities have been selected and MSP is set after taking into consideration the cost of production for all seasons.”
“So for example, If MSP for onions is set for Rs 8 per kg and the farmer gets the same price, the government has no role. Whereas, if the farmer gets Rs 7 per kg, then Re 1 will be paid by the government. So far, this is being done only for perishable commodities for now,” he added.
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