GS SCORE- Centre Rules out MSP Law

 The ongoing farmer protests in India have once again brought the issue of Minimum Support Price (MSP) to the forefront. As farmers take to the streets demanding legal guarantees for MSP, the government faces a delicate balancing act.

What Is MSP?

  • Minimum Support Price (MSP) is the price set by the government at which it directly purchases agricultural products from farmers if the open market prices fall below this threshold.
  • The primary purpose of MSP is to protect farmers against drastic price fluctuations during market volatility.
  • It ensures a safety net for farmers, especially during bumper production years.
  • It covers 22 crops, including paddy, wheat, maize, arhar (pigeon pea), cotton, and mustard seeds and Fair and Remunerative Price for sugarcane.


The MSP is calculated based on different cost components:

  • A2 Cost: This includes actual paid-out expenses such as seeds, fertilizers, pesticides, labor, and other direct costs incurred during cultivation.
  • A2+FL Cost: In addition to A2, this covers the imputed value of family labor involved in farming. It recognizes the contribution of family members who work on the farm without receiving a direct wage.
  • C2 Cost: The most comprehensive, C2 encompasses A2+FL and adds rental value of owned land and interest on capital (including machinery and equipment). It represents the total cost of production and ensures a reasonable return on investment for farmers
  • The MSP is recommended by the Commission for Agricultural Costs and Prices (CACP) based on various factors:
    • Cost of Production: The CACP considers the cost incurred by farmers in cultivating a crop, including expenses on seeds, fertilizers, labor, and machinery.
    • Demand and Supply: The availability of a particular crop in the market influences its MSP. If there’s excess supply, the MSP may be adjusted accordingly.
    • Price Trends: Domestic and international price trends impact the MSP. The government aims to provide a price that covers production costs and ensures a reasonable profit for farmers.
    • Terms of Trade: The balance between agricultural and non-agricultural sectors affects the MSP. The government strives to maintain a fair exchange between these sectors.
  • Significance of MSP
    • Income Security: MSP assures farmers a minimum income for their produce. It encourages them to invest in agriculture without fear of losses.
    • Market Stability: By setting a floor price, MSP prevents drastic fluctuations in crop prices. This stability benefits both farmers and consumers.
    • Food Security: MSP ensures adequate food production. It incentivizes farmers to grow essential crops like wheat, rice, and pulses.

The Swaminathan Commission’s Recommendation

  • The MS Swaminathan Commission, in its report, recommended that the government should raise the MSP to at least 50% more than the weighted average cost of production (C2+ 50% formula).
  • This formula includes the imputed cost of capital and land rent, providing farmers with a fair return on their investment.

Comments

Post a Comment

Popular posts from this blog

Mastering UPSC Mains Answer Writing: A Guide to Success

Image
For any aspiring civil servant in India, the (Union Public Service Commission) Mains exam is the final take a look at of knowledge, knowledge, and articulation. Among the diverse additives of the exam, learning solution writing for the Mains is crucial, because it determines the candidate`s capacity to examine, synthesize, and talk efficiently on a extensive variety of topics. In this manual, we can delve into the intricacies of IAS Mains solution writing, presenting insights and techniques to excel on this important component of the exam. Understanding the UPSC Mains Answer Writing The UPSC Mains exam includes a sequence of descriptive papers overlaying various topics which include General Studies, Optional Subjects, and Essay Writing. Unlike the Preliminary exam, that's goal in nature, the Mains take a look at the candidate's complete knowledge of the problem count number and their capacity to explicit their thoughts coherently via essay-kind solutions. Each query withinside...
Read more

Master the UPSC Mains 2025 with GS SCORE’s Comprehensive Program

Image
Preparing for UPSC Mains 2025 requires a strategic approach, in-depth understanding, and consistent practice. GS SCORE’s IAS Mains Foundation program is meticulously designed to meet these demands, providing a comprehensive roadmap to navigate the complexities of the UPSC Mains examination. Structured and Systematic Learning Our IAS Mains Foundation program offers a well-structured curriculum that covers all essential topics comprehensively. Each subject is broken down into manageable modules, ensuring you build a strong foundation before moving on to advanced concepts. This systematic approach helps in retaining information and understanding the interconnections between different subjects. Expert Faculty and Personalized Guidance At GS SCORE, we pride ourselves on our team of experienced faculty members who bring in-depth knowledge and teaching expertise to the table. They not only deliver insightful lectures but also provide personalized guidance to address individual learning need...
Read more