Over 81% of farmers are aware of MSP: Niti Aayog

By: |
December 16, 2015 12:04 AM

A vast majority of farmers in the country are aware of the minimum support price (MSP) for various agricultural crops, such as rice, wheat, pulses, coarse cereals and oilseeds, announced by the government annually, a study by Niti Aayog has stated.

A vast majority of farmers in the country are aware of the minimum support price (MSP) for various agricultural crops, such as rice, wheat, pulses, coarse cereals and oilseeds, announced by the government annually, a study by Niti Aayog has stated.

“Eighty-one percent of the cultivators are aware of MSP fixed for different crops in various states while 67% of the farmers sold their produces through their own arrangements,” a Niti Aayog study on evaluation of the efficacy of MSP on farmers had stated. The study took the period between 2007-8 and 2010 -11 as reference period.

The study, according to a paper laid in the parliament by food minister Ram Vilas Pawan, had found out that the share of sales by farmers through private and government agencies were 8% and 4%, respectively. However 94% of the farmers covered under the study wanted MSP to continue. The Niti Aayog study also found out that 32.13%, 41.29% and 27.4% of the farmers received their MSP payment through in cash, cheque and in the shape of bank deposit

The Commission for Agricultural Costs and Prices (CACP) under the ministry of agriculture usually recommends MSP for kharif and rabi crops, ahead of the sowing season annually. Subsequently, the Union Cabinet approves the quantum of MSPs.

However, the Food Corporation of India (FCI) and state government agencies only purchase rice and wheat from the farmers in mostly grain surplus states such as Punjab, Haryana, Madhya Pradesh, Rajasthan, Chhattisgarh, Odisha, Andhra Pradesh and Telangana. Besides, agencies such as Nafed, Cotton Corporation of India, Small Farmers Agri-Consortium (SFAC) and state government agencies carry out pulses, oilseeds and copra from the farmers from time to time.

Earlier in the year, a high-level committee (HLC) chaired by former food minister Shanta Kumar set up for the restructuring of FCI had stated that only 6% of farmers get benefit of MSPs as majority of farmers are outside purview MSP mechanism. HLC, in its report, had urged the government revisit MSP policy as only few commodities are being purchased by agencies.

“Currently, MSPs are announced for 23 commodities, but effectively price support operates primarily in wheat and rice and that too in selected states. This creates highly skewed incentive structures in favour of wheat and rice,” the HLC had noted. The committee stated that while the country is short of pulses and oilseeds, their prices often go below MSP without any effective price support.

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