Centre fixes MSP for 22 mandated crops including paddy, jowar and bajra.
Thousands of protesting farmers continue to camp at the Shambhu and Khanauri points of the Punjab-Haryana border to press for their demands including a law on Minimum Support Price (MSP). Earlier, the Centre proposed procuring pulses, maize and cotton at the MSP by government agencies for five years, but farmers rejected it. What is MSP and is it decided by the central government?
MSP for a crop is the price at which the government is supposed to procure/buy that crop from farmers. Presently, the Government of India (GOI) fixes MSP for 22 mandated crops including paddy, jowar and bajra. MSP is a price fixed by GOI to protect farmers against excessive falls in price during bumper production years. Centre fixes MSP based on the recommendations of the Commission for Agricultural Costs & Prices (CACP), views of state governments and central ministries/departments concerned. It is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
CACP considers various factors such as cost of production, demand and supply, market price trends, inter-crop price parity, etc before giving recommendations to the Centre. The Cabinet Committee on Economic Affairs (CCEA) chaired by the Indian Prime Minister makes the final decision (approval) on the level of MSPs.
The MSPs are announced at the beginning of the sowing season. The major objectives are to support the farmers from distress sales and to procure food grains for public distribution. The 22 mandated crops for which MSP is given include 14 crops of the kharif season, six rabi crops and two other commercial crops.
READ | DNA TV Show: Why farmers' issues still not resolved despite four rounds of talks
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 "DNA Explainer: What is MSP and how is it decided by Centre?")
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