MINIMUM SUPPORT PRICE (MSP) FOR AGRICULTURAL PRODUCE

MINIMUM SUPPORT PRICE (MSP) FOR AGRICULTURAL PRODUCE   - FEW INSIGHTS FOR TAKING APPROPRIATE DECISIONS

Background:

Then UPA Government under the leadership of Dr. Manmohan Singh appointed Dr. M S Swaminathan committee to look into the issues related to farmers and how to bring them out of agrarian crisis. The committee had gone into the details and recommended to revise MSP calculations considering cost of production plus 50% and protect farmer’s interests, so that farming will be a viable option with decent livelihoods. For some reasons, though the recommendations were presented and considered, could not be implemented before 2014 general elections. The PIL filed by few farmers’ organisations asking Supreme Court to direct GOI to implement the committee report was kept aside by stating that court cannot direct government to implement the policy decisions.

The present NDA government under Sri Narendra Modi leadership recently took up the task of “DOUBLING FARMERS INCOME BY 2022” as major issue and initiated various seminars, action plans, deliberations etc to move forward in this direction. The recent announcement in union budget related to MSP is a welcome move in this direction.

Now it is in the hands of various policy bodies including all state governments, Niti Aayog, Commission for Agriculture Costs and Prices (CACP), Food, Agriculture, Commerce, HRD and other ministries, Agribusiness institutions, Agri universities and other agencies with similar objectives to work with synergy and see that fair methodology is put in place to ensure proper MSP  ,keeping the rationale and farmers long term interests in view.

Methodology for MSP

• CACP – capturing the methodology, data collection process followed analysis etc and decide on new methodology based on the learning from CACP.    

• Noted economists like Dr. Mahender Dev, Ex Chairman, CACP and Gulati, other such personalities views shall be taken into consideration and integrate the same with the objective of doubling farmers’ incomes and new MSP methodology.

• It is clear that “One nation – one MSP for one crop”. Based on this, the methodology of data collection and analysis shall be decided capturing the data based on agro climatic zones in each state.

• Data analysis shall be through a sound statistical model to minimize the errors and to ensure maximum accuracy.

MSP Guidelines:

• Each crop data shall be collected separately and analysis shall be done on individual crop wise.

• As over 70% farmers are cultivating on lease lands, the land lease has to be considered as input.  

• Data from all the states for respective crops agro climatic zones wise is to be collected to even out the disparities.

• Land lease shall be apportioned crop wise. For example in irrigated areas farmers take two to three crops, so the land lease will be 1/3 or ½.  Maize is 100 day crop and in combinations 3 to 4 crops can be taken in irrigated areas (Maize, Sweet Corn, Black Gram, and Chana). 

• Data has to be analysed for each zone separately and arrive at per acre cost and finally compute on weighted average basis to even out the disparities to the extent possible.

• Package of practises followed in different states and zones such as direct broadcasting vs. nursery system, manual harvesting vs. mechanical harvesters, drip irrigation vs. flood irrigation etc has to be captured and factored in arriving at the cost of cultivation and focus shall be shifting to better practices.

• Sugarcane is another important crop and  it is  under FRP and SAP pricing mechanism. It also shall be brought under MSP and Rangarajan committee recommendations on sugar industry reforms and cane pricing shall be considered in deciding MSP for sugarcane.

• Ethanol blending shall be increased to minimum of 10% or even more with systematic crop plan to increase maize production (India has potential to double its maize production without affecting other food crops) and encourage grain based distilleries.    

• Imports of agricultural commodities shall be put to more stringent decision making procedures which shall include Agri, food and commerce ministries and farmers interests shall be made as focal point in the decisions. For example if country feels that maize is going to be under shortage in coming six months, instead taking import decision, we can plan internal production as the crop cycle is less than 100 days. 

• The medium to long term bilateral agreements related to pulses imports shall be put to review in the larger interest of Indian farmers. 

• Farmers organisations from various states shall be taken into confidence and practicing farmers voices shall be given due weightage in decision making bodies.

• Our immediate thrust should on oil seeds production. Its unfortunate to see than both groundnut and soya are selling below MSP and country's import bill on cooking oils is huge.

• Our policy on GM crops has to be reviewed. We ban GM maize, GM mustard , but importing corn oil from countries which grow GM maize. India grow GM cotton, but GM oils are banned, still GM cotton seed is going into cotton seed oil units.

• India being a tropical country, with good soils, irrigation, climate, hard working farmers, we can grow any crop and there is no need to depend on other countries for our basic food needs. 

• Import of some fancy foods is ok, but if we depend on world for our cereals, sugar etc, it is something wrong and  certainly we need to look back at our systems and ensure that we are self sufficient.

Requesting policy makers to consider our views in deciding on decent MSP to farmers and move forward in achieving the goal of “DOUBLING THE FARMERS INCOME BY 2022”.

 B Guruva Reddy 9866889246

grbonthu@gmail.com