The Centre has increased the minimum support price (MSP) for wheat for the upcoming rabi season.
Oilseeds and pulses such as mustard, safflower and masoor dal saw higher MSP increases of up to 8% in a bid to encourage crop diversification.
GS-III: Agriculture (Agriculture Pricing), GS-II: Social Justice (Welfare Schemes)
Dimensions of the Article:
- What is Minimum Support Price (MSP)?
- Why is there a need for MSP?
- What are the issues related to MSP?
- Back to the Basics: Types of Crops
What is Minimum Support Price (MSP)?
- Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the price for the crops.
- Commission for Agricultural Costs & Prices (CACP) in the Ministry of Agriculture recommends MSPs for 23 crops. These include 14 grown during the kharif/post-monsoon season (see table) and six in rabi/winter (wheat, barley, chana, masur, mustard and safflower), apart from sugarcane, jute and copra
- CACP consider various factors while recommending the MSP for a commodity like cost of cultivation, supply and demand situation for the commodity; market price trends (domestic and global) and parity vis-à-vis other crops etc.
- MSP seeks to:
- Assured Value: To give guaranteed prices and assured market to the farmers and save them from the price fluctuations (National or International).
- Improving Productivity: By encouraging higher investment and adoption of modern technologies in agricultural activities.
- Consumer Interest: To safeguard the interests of consumers by making available supplies at reasonable prices.
Why is there a need for MSP?
- The MSP is a minimum price guarantee that acts as a safety net or insurance for farmers when they sell particular crops.
- The guaranteed price and assured market are expected to encourage higher investment and in adoption of modern technologies in agricultural activities.
- With globalization resulting in freer trade in agricultural commodities, it is very important to protect farmers from the unwarranted fluctuation in prices.
What are the issues related to MSP?
- Low accessibility and awareness of the MSP regime: A survey highlighted that, 81% of the cultivators were aware of MSP fixed by the Government for different crops and out of them only 10% knew about MSP before the sowing season.
- Arrears in payments: More than 50% of the farmers receive their payments of MSP after one week.
- Poor marketing arrangements: Almost 67% of the farmers sell their produce at MSP rate through their own arrangement and 21% through brokers.
- According to NITI Aayog report on MSP, 21% of the farmers of the sample States expressed their satisfaction about MSP declared by the Government whereas 79% expressed their dissatisfaction due to various reasons. Although, majority of the farmers of the sample States were dissatisfied on MSP rates, still 94% of them desired that the MSP rates should be continued.
Back to the Basics: Types of Crops
India has three cropping seasons — Rabi, Kharif and Zaid.
- Rabi crops are sown in winter from October to December and harvested in summer from April to June.
- Some of the important rabi crops are wheat, barley, peas, gram and mustard.
- Though, these crops are grown in large parts of India, states from the north and north-western parts such as Punjab, Haryana, Himachal Pradesh, Jammu and Kashmir, Uttarakhand and Uttar Pradesh are important for the production of wheat and other rabi crops.
- Availability of precipitation during winter months due to the western Temperate Cyclones help in the success of these crops.
- However, the success of the green revolution in Punjab, Haryana, western Uttar Pradesh and parts of Rajasthan has also been an important factor in the growth of the abovementioned rabi crops.
- Kharif crops are grown with the onset of monsoon in different parts of the country and these are harvested in September-October.
- Important crops grown during this season are paddy, maize, jowar, bajra, tur (arhar), moong, urad, cotton, jute, groundnut and soyabean.
- Some of the most important rice-growing regions are Assam, West Bengal, coastal regions of Odisha, Andhra Pradesh, Telangana, Tamil Nadu, Kerala and Maharashtra, particularly the (Konkan coast) along with Uttar Pradesh and Bihar.
- Recently, paddy has also become an important crop of Punjab and Haryana. In states like Assam, West Bengal and Odisha, three crops of paddy are grown in a year. These are Aus, Aman and Boro.
- In between the rabi and the kharif seasons, there is a short season during the summer months known as the Zaid season.
- Some of the crops produced during ‘zaid’ are watermelon, muskmelon, cucumber vegetables and fodder crops. Sugarcane takes almost a year to grow.
-Source: The Hindu