{"id":22204,"date":"2024-03-01T17:57:14","date_gmt":"2024-03-01T12:27:14","guid":{"rendered":"https:\/\/www.nextias.com\/ca\/?p=22204"},"modified":"2024-03-01T17:58:57","modified_gmt":"2024-03-01T12:28:57","slug":"legalising-the-minimum-support-price-msp","status":"publish","type":"post","link":"https:\/\/www.nextias.com\/ca\/editorial-analysis\/01-03-2024\/legalising-the-minimum-support-price-msp","title":{"rendered":"Legalising the Minimum Support Price (MSP)"},"content":{"rendered":"\n<p><strong>Syllabus: GS3\/Economy, Agriculture<\/strong><\/p>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-0cb2d8d8970fcc76e5fb15bd21ee6252\" style=\"color:#015aa7\"><strong>Context<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Recently, the groups of farmers asked for a legal guarantee for purchasing crops at Minimum Support Price (MSP).<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-6b2291066d4636e74ec52986f1db6c3f\" style=\"color:#015aa7\"><strong>Minimum Support Price (MSP)<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>It is a form of market intervention by the Central Government to insure agricultural producers against any sharp fall in farm prices.<\/li>\n\n\n\n<li>It protects the producer- farmers against distress sale during bumper production years.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-7ee762fdf9737426fcc67953b84ed7a0\" style=\"color:#015aa7\"><strong>Current Status of MSP<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The UnionGovernment sets a MSP for<strong> 23 crops<\/strong> before the sowing period every year, based on a formula of one-and-a-half times production costs.\n<ul class=\"wp-block-list\">\n<li>It is implemented <strong>mostly for rice and wheat<\/strong> mainly because India has vast storage facilities for these grains and uses the produce for its public distribution system (PDS).<\/li>\n<\/ul>\n<\/li>\n\n\n\n<li>It takes into account both paid-out costs such as seeds, fertilisers, pesticides, fuel, irrigation, hired workers and leased-in land, as well as the imputed value of unpaid family labour.\n<ul class=\"wp-block-list\">\n<li>However, there is <strong>currently no statutory backing<\/strong> for these prices, nor any law mandating their enforcement. A farmer cannot demand MSP as a matter of right.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Crops Covered under MSP<\/strong><br><br>&#8211; <strong>Kharif Crops<em> (total 14)<\/em><\/strong> like paddy, jowar, bajra, maize, ragi, tur\/arhar, moong, urad, groundnut, soyabean, sunflower, sesamum, niger seed, cotton;<br>&#8211; <strong>Rabi Crops<\/strong> <strong><em>(total 06)<\/em><\/strong><em> like <\/em>wheat, barley, gram, masur\/lentil, rapeseed and mustard,and safflower; and<br>&#8211; <strong>Commercial Crops<\/strong> <strong><em>(total 02) <\/em><\/strong>like jute and copra.<br>a. MSP for Toria and de-husked coconut is also fixed on the basis of MSPs of rapeseed &amp; mustard and copra respectively.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-2d6f8685d2c13fa1e8a01bfbd5f5baab\" style=\"color:#015aa7\"><strong>Demand for Legal Guarantee<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Farmers have been demanding a legal guarantee for MSP by arguing that without such a price, farmers will become bankrupt and leave farming, which will have serious consequences for our food security, adversely affecting consumers.<\/li>\n\n\n\n<li>The demand for a legal guarantee for MSP has two parts:<\/li>\n<\/ul>\n\n\n\n<ol class=\"wp-block-list\">\n<li>MSP should be based on the comprehensive cost of production (C2), as determined by the <strong>Commission for Agricultural Costs and Prices (CACP)<\/strong>, plus 50%, as recommended by the <strong>Swaminathan Commission.<\/strong><\/li>\n\n\n\n<li>The 23 crops for which MSP is announced should be legally purchased at or above the MSP price by anyone who <strong>\u2018willingly enters\u2019<\/strong> the market.<\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-4a90c77be770a1f99b01959ee6418497\" style=\"color:#015aa7\"><strong>Arguments Favouring Legalising MSP<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Agricultural Crisis:<\/strong> The agricultural sector has been squeezed in many ways over the past 30 years, and there is a need for a legal guarantee for MSP to address this crisis.<\/li>\n\n\n\n<li><strong>Nutrition Security: <\/strong>As India shifts from food security to nutrition security, a legal guarantee for MSP for 23 crops could be a way to achieve this.<\/li>\n\n\n\n<li><strong>Price Stabilisation:<\/strong> The government is not expected to buy all the 23 crops. But if at least 5-10% of the produce is purchased, it would be a marginal intervention and stabilise the prices.<\/li>\n\n\n\n<li><strong>Support to Farmers:<\/strong> The government\u2019s price policy is to ensure remunerative prices to farmers by offering to procure their produce at MSP.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-6e2a0bd97c2b0acb254355771c309f36\" style=\"color:#015aa7\"><strong>Arguments Against Legalising MSP<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Implementation Challenges:<\/strong> While the Centre has fixed MSP for 23 farm commodities, it is implemented mostly for rice and wheat mainly because India has vast storage facilities for these grains.<\/li>\n\n\n\n<li><strong>Limited Reach:<\/strong> According to the<strong> Shanta Kumar Committee\u2019s 2015 report<\/strong>, only 6% of the farm households sell wheat and rice to the government at MSP rates.<\/li>\n\n\n\n<li><strong>Need for Policy Review:<\/strong> There is a need for a detailed, thorough review of agricultural trade policies and production and also what will happen to agriculture in the next 20-25 years.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-c04450ed9a0e82ec354135db7afd9b15\" style=\"color:#015aa7\"><strong>Government\u2019s Stand<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The Union government has repeatedly asserted that a legal guarantee for MSP will not be possible by arguing that MSP is a minimum price that the farmer must get to remain in business.\n<ul class=\"wp-block-list\">\n<li>However, it has not taken any concrete steps towards providing a legal guarantee for MSP.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Agriculture and Constitution of India<\/strong><br><br>&#8211; Agriculture is primarily mentioned in the State List and the Concurrent List of Schedule VII of the Constitution of India.<br><br><strong>State List (List II)<\/strong><br><br>&#8211; <strong>Entry 14:<\/strong> Agriculture, including agricultural education and research, protection against pests, and prevention of plant diseases.<br>&#8211; <strong>Entry 28:<\/strong> Markets and Fairs.<br>&#8211; <strong>Entry 30:<\/strong> Money-lending and money-lenders; relief of agricultural indebtedness.<br>&#8211; <strong>Entry 45:<\/strong> Land revenue, including the assessment and collection of revenue, the maintenance of land records, survey for revenue purposes, and records of rights, and alienation of revenues.<br>&#8211; <strong>Entry 64: <\/strong>Offences against laws with respect to any of the matters in this List.<br><br><strong>Concurrent List (List III):<\/strong><br><br>&#8211; <strong>Entry 33:<\/strong> It covers foodstuffs, including edible oilseeds and oils; cattle fodder, including oilcakes and other concentrates; raw cotton, and cottonseed; and raw jute.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<h2 class=\"wp-block-heading has-text-color has-link-color wp-elements-d0adc4bd9eb2e9b9b187dc32f0e06642\" style=\"color:#015aa7\"><strong>Conclusion<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The debate around the legality of MSP in India is complex and multifaceted. It involves considerations of <strong>economic policy, agricultural sustainability, and social justice.<\/strong><\/li>\n\n\n\n<li>While the demand for a legal guarantee for MSP is strong among farmers, the government and policy makers need to consider the broader implications of such a move.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-table\"><table class=\"has-background\" style=\"background-color:#ebecf0\"><tbody><tr><td><strong>Daily Mains Practice Question<\/strong><br><strong>[Q] <\/strong>Do you think legalising the Minimum Support Price (MSP) in India would be beneficial for the farmers and the agricultural sector as a whole? Give your arguments.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\">\n<div class=\"wp-block-button\"><a class=\"wp-block-button__link wp-element-button\" href=\"https:\/\/www.nextias.com\/ca\/wp-content\/uploads\/2024\/03\/Daily-Editorial-Analysis-1-03-2024.pdf\">Download PDF<\/a><\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>Syllabus: GS3\/Economy, Agriculture Context Minimum Support Price (MSP) Current Status of MSP Crops Covered under MSP &#8211; Kharif Crops (total 14) like paddy, jowar, bajra, maize, ragi, tur\/arhar, moong, urad, groundnut, soyabean, sunflower, sesamum, niger seed, cotton;&#8211; Rabi Crops (total 06) like wheat, barley, gram, masur\/lentil, rapeseed and mustard,and safflower; and&#8211; Commercial Crops (total 02) [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[22],"tags":[],"class_list":["post-22204","post","type-post","status-publish","format-standard","hentry","category-editorial-analysis"],"acf":[],"jetpack_featured_media_url":"","_links":{"self":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/22204","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/comments?post=22204"}],"version-history":[{"count":4,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/22204\/revisions"}],"predecessor-version":[{"id":22209,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/posts\/22204\/revisions\/22209"}],"wp:attachment":[{"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/media?parent=22204"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/categories?post=22204"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.nextias.com\/ca\/wp-json\/wp\/v2\/tags?post=22204"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}