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hindu msp

The government is prepared to create all the facilities and infrastructure needed to procure foodgrains, even as the Cabinet prepares to hike Minimum Support Prices (MSP) for kharif crops, Union Food Minister Ram Vilas Paswan said.

The Union Cabinet is expected to meet on Wednesday, and approve MSPs for 23 crops at 1.5 times the input costs. For MSPs to be implemented on the ground, the government would also need to step up its procurement capacities.

Impact on budget

Asked about the impact of the hike in MSPs on the government budget and on consumer food prices, Mr. Paswan said no one complains when the price of cars is increased, or when other consumer items become expensive.

“Why is there a problem when the government decides to pay farmers more for their produce?” he asked, pointing out that farmers make a vital contribution to the economy. The Minister was speaking to reporters on the sidelines of the national executive meeting of his Lok Janshakti Party on Tuesday.

points to be noted in news ?

what is called as msp ?

minimum support price ( msp) is given by government of india for agriculture crops include both food crops and cash crops if the crop does not get minimum value in market after harvest

msp supports :

Historical perspective of MSP

The Price Support Policy of the Government is directed at providing insurance to agricultural producers against any sharp fall in farm prices. The minimum guaranteed prices are fixed to set a floor below which market prices cannot fall. Till the mid 1970s, Government announced two types of administered prices :

  • Minimum Support Prices (MSP)
  • Procurement Prices

The MSPs served as the floor prices and were fixed by the Government in the nature of a long-term guarantee for investment decisions of producers, with the assurance that prices of their commodities would not be allowed to fall below the level fixed by the Government, even in the case of a bumper crop. Procurement prices were the prices of kharif and rabi cereals at which the grain was to be domestically procured by public agencies (like the FCI) for release through PDS. It was announced soon after harvest began. Normally procurement price was lower than the open market price and higher than the MSP. This policy of two official prices being announced continued with some variation upto 1973-74, in the case of paddy. In the case of wheat it was discontinued in 1969 and then revived in 1974-75 for one year only. Since there were too many demands for stepping up the MSP, in 1975-76, the present system was evolved in which only one set of prices was announced for paddy (and other kharif crops) and wheat being procured for buffer stock operations.

Determination of MSP

In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the Commission takes into account, apart from a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities, the 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 Commission makes use of both micro-level data and aggregates at the level of district, state and the country. The information/data used by the Commission, inter-alia include the following :-

  • Cost of cultivation per hectare and structure of costs in various regions of the country and changes there in;
  • Cost of production per quintal in various regions of the country and changes therein;
  • Prices of various inputs and changes therein;
  • Market prices of products and changes therein;
  • Prices of commodities sold by the farmers and of those purchased by them and changes therein;
  • Supply related information – area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry;
  • Demand related information – total and per capita consumption, trends and capacity of the processing industry;
  • Prices in the international market and changes therein, demand and supply situation in the world market;
  • Prices of the derivatives of the farm products such as sugar, jaggery, jute goods, edible/non-edible oils and cotton yarn and changes therein;
  • Cost of processing of agricultural products and changes therein;
  • Cost of marketing – storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; and
  • Macro-economic variables such as general level of prices, consumer price indices and those reflecting monetary and fiscal factors.

Source : Farmer Portal

Pricing policy for sugarcane

The pricing of sugarcane is governed by the statutory provisions of the Sugarcane (Control) Order, 1966 issued under the Essential Commodities Act (ECA), 1955. Prior to 2009-10 sugar season, the Central Government was fixing the Statutory Minimum Price (SMP) of sugarcane and farmers were entitled to share profits of a sugar mill on 50:50 basis. As this sharing of profits remained virtually unimplemented, the Sugarcane (Control) Order, 1966 was amended in October, 2009 and the concept of SMP was replaced by the Fair and Remunerative Price (FRP) of sugarcane. A new clause ‘reasonable margins for growers of sugarcane on account of risk and profits’ was inserted as an additional factor for working out FRP and this was made effective from the 2009-10 sugar season. Accordingly, the CACP is required to pay due regard to the statutory factors listed in the Control Order, which are

  • the cost of production of sugarcane;
  • the return to the grower from alternative crops and the general trend of prices of agricultural commodities;
  • the availability of sugar to the consumers at a fair price;
  • the price of sugar;
  • the recovery rate of sugar from sugarcane;
  • the realization made from sale of by-products viz. molasses, bagasse and press mud or their imputed value (inserted in December, 2008) and;
  • reasonable margins for growers of sugarcane on account of risk and profits (inserted in October, 2009).
States also announce a price called the State Advisory Price (SAP), which is usually higher than the SMP.

Crops covered

26 commodities are currently covered. They are 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
  • Copra
  • De-husked coconut
  • Raw cotton
  • Raw jute
  • Sugarcane (Fair and remunerative price)
  • Virginia flu cured (VFC) tobacco

Minimum Support Price for 2017-18

Sowing season in India of crops varies from state to state and the harvesting of the crop also depends on variety. Thus a harvested crop sown in kharif 2016-17 may reach in the market even before October. MSP of Kharif Crops for 2017-18 Season applicable is applicable from 1 September 2017.

Commodity

Variety

MSP for 2016-17    (Rs per quintal)

MSP for 2017-18    (Rs per quintal)

Increase over previous year (Rs per quintal)

KHARIF CROPS
Paddy Common

1470

1550

80

Grade ‘A’

1510

1590

80

Jowar Hybrid

1625

1700

75

Maldandi

1650

1725

75

Bajra

1330

1425

95

Maize

1365

1425

60

Ragi

1725

1900

175

Arhar (Tur)

5050 (includes Rs.425/- Bonus)

5450 (includes Rs.200- Bonus)

400

Moong

5225 (includes Rs.425/- Bonus)

5575 (includes Rs.200/- Bonus)

350

Urad

5000 (includes Rs.425/- Bonus)

5400 (includes Rs.200- Bonus)

400

Cotton Medium Staple *

3860

4020

160

Long Staple **

4160

4320

160

Groundnut in shell

4220 (includes Rs.100/- Bonus)

4450 (includes Rs.200/- Bonus)

230

Sunflower seed

3950 (includes Rs.100/- Bonus)

4100 (includes Rs.100/- Bonus)

150

Soyabeen Yellow and Black 2775 (includes Rs.100/- Bonus) 3050 (includes Rs.200/- Bonus) 275
Sesamum

5000 (includes Rs.100/- Bonus)

5300 (includes Rs.100/- Bonus)

300

Nigerseed

3825 (includes Rs.100/- Bonus)

4050 (includes Rs.100/- Bonus)

225

RABI CROPS (To be marketed in 2018-19)
Wheat

1625

1735

110

Barley

1325

1410

85

Gram

4000 ((includes bonus of Rs.200 per quintal)

4400 (includes bonus of Rs. 150 per quintal)

400

Masur (Lentil)

3950 (includes bonus of Rs.150 per quintal)

4250 (includes bonus of Rs.100 per quintal)

300

Rapeseed/Mustard

3700 (includes bonus of Rs.100 per quintal)

4000 (includes bonus of Rs.100 per quintal)

300

Safflower

3700 (includes bonus of Rs.100 per quintal)

4100 (includes bonus of Rs.100 per quintal)

400

Toria

3560

3900

340

OTHER CROPS
Copra (2018 crop season) Milling

7511

Ball

6785

De-husked coconut

2030

Raw Jute (for 2018-19 season)

3700

Sugarcane $

230

* Staple length (mm) of 24.5 -25.5 and Micronaire value of 4.3 -5.1
** Staple length (mm) of 29.5 -30.5 and Micronaire value of 3.5 -4.3
$ Fair and remunerative price

The Fair and Remunerative Price payable by sugar mills for 2017-18 sugar season has been fixed at Rs.255/- per quintal. This will be linked to a basic recovery rate of 9.5 percent, subject to a premium of Rs.2.68 per quintal for every 0.1 percentage point increase in recovery above that level.

source : hindu news paper and pib

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