Consider the following statements:In the case of all cereals, pulses and oil-seeds, the procurement

Question

Consider the following statements:In the case of all cereals, pulses and oil-seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India.In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise.Which of the statements given above is/are correct?

Accepted Answer

Based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), the Department of Agriculture and Cooperation, Ministry Of Agriculture And Farmers' Welfare, declares Minimum Support Prices (MSP) for 22 mandated crops, and Fair and Remunerative Price (FRP) for Sugarcane.Cereals (7) - paddy, wheat, barley, jowar, bajra, maize and ragiPulses (5) - gram, arhar/tur, moong, urad and lentilOilseeds (8) - groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum, safflower seed and nigerseedRaw cottonRaw juteCopraThe idea behind MSP is to give guaranteed price and assured market to the farmers and protect them from the price fluctuations and market imperfections. CACP considers various factors such as the cost of cultivation and production, productivity of crops, and market prices for the determination of MSPs. MSP fixed for each crop is uniform for the entire country. However, there is no instance of MSP being fixed in any State/UT at a level to which the market price will never rise. Hence statement 2 is not correct.While the government announces MSP for 23 crops, effective MSP-linked procurement occurs mainly for wheat, rice and cotton. The procurement is also limited to a few states. Due to limitations on the procurement side (both crop-wise and state-wise) and even after having an open-ended procurement at MSP, all farmers do not receive benefits of an increase in MSP. Hence statement 1 is not correct.Source Attribution: Economic Survey - 18, Economic Survey - 16