Coverage and performance of MSP far from satisfactory: MSSRF

By- INN/Bangalore, @Infodeaofficial

The Cabinet’s higher MSP announcement today in recognition of the economic problems of farmers has evoked responses from experts. The economic and ecological health of agriculture is not good as is clear from the massive protests by farmer organisations and the recurring farmer suicides. While the two main demands of the farmer’s movement are for loan waiver and remunerative prices, monsoon and the market play an important role in the profitability and stability of the income from agriculture. 

MS Swaminathan Research Centre Chennai in its release stated that the government has taken steps to improve crop insurance but the coverage and performance are still far from satisfactory and risks are still high leading to demand for higher price and credit reform.

The marketing support policy for the farmers should consist of a minimum support price or MSP based on the formula of C2 + 50%, a favourable procurement policy to ensure that farmers receive the MSP and increase consumption through the effective implementation of the Food Security Act, noon meal programmes in government schools etc.

The MSP announced by the Cabinet today is higher in absolute terms but below the recommended level. For example, the MSP of common paddy has been hiked from Rs 1550 to Rs 1750 per quintal. Taking the C2 cost of last year (2017-18) and assuming a 3.6 %rise in the input costs based on the input cost index used by CACP, the estimated C2 cost for this year (2018-19) is Rs 1524. So, the new MSP is C2+15% and not C2+50%.

In case of Ragi, the new MSP is C2+20% and for moong, the MSP has been raised from Rs 5575 to Rs 6975, which has become C2+19% now. Higher MSPs are welcome but there is inadequate public procurement for MSP, except in cases of wheat and rice. This is clear from the experience of farmers who cultivated more pulses expecting procurement but were let down by the crash in market prices.

For many crops including Urad, Tur, Maize, Groundnut, Soyabean, Bajra, Rapeseed and Mustard, the average mandi (local market) price was below the corresponding MSP before the monsoons.  

Other steps recommended by the National Commission on Farmers that will help to improve both income stability as well as total income from farming should be introduced. Appropriate measures are also needed to ensure that groundwater isn’t subject to over-exploitation and other eco-destructive activities are limited. The announcement of higher MSPs serves as the welcoming step in the process to overcome the agrarian crisis. This has to be followed by more action in terms of procurement and storage.

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