The Commission for Agricultural Costs and Prices (CACP), which recommends the minimum support prices for crops, has said farmers must be given the “right to sell (their produce) at MSP”.
The suggestion, if implemented, could dramatically scale up the government’s crop procurement and storage costs.
The suggestion comes close on the heels of the government’s promise in Parliament to ensure that farmers receive at least the MSP when market prices fall. The government is deliberating on schemes that would ensure that farmers realise MSPs. Apart from a procurement-based system, it is also considering an MSP-based deficiency payments scheme, where farmers are paid the difference between the MSP and market prices, in case the latter fall below the former.
“It has been observed that farmers of remote areas often do not have sufficient access to APMCs and their potential market is local haats where their produce is sold below the MSP. Therefore, for such farmers, procurement centres need to be opened in remote areas at the gram panchayat level. Furthermore, to instill confidence among farmers for procurement of their produce, a legislation conferring on farmers ‘the right to sell at MSP’ may be brought out,” the CACP said.
Meanwhile, the minister of state for agriculture Gajendra Singh Shekhawat said on Friday that the government would soon announce a new mechanism to ensure that farmers get the MSPs if market prices fall below the benchmark rate.
On Wednesday, the government announced 4-52% increases in the minimum support prices (MSPs) for 14 kharif crops for the 2018-19 season and flagged the new MSPs being 50-97% higher than the full paid-out costs (A2+FL) as unprecedented and historic.
An OECD-Icrier report has asked for a review of the process where MSPs are set in relation to production costs. This, it said, is necessary to avoid “locking in inefficient high-cost production and raising prices for consumers”.
