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Rediff News  All News  » Business » MSP for farmers outdated, says committee

MSP for farmers outdated, says committee

May 02, 2007 10:36 IST
The standing committee on agriculture has criticised the government's criteria of fixing the Minimum Support Price for the farmers. Now the MSP is generated as per the recommendation of Commission Agriculture Costs and Prices.

The 12-member committee headed by Ram Gopal Yadav, MP, Samajwadi Party said ``the present practice by CACP has become outdated'', and the prices so fixed are not delivering the desired benefits to the farmers''.

The committee, therefore, has recommended that the minimum support prices should be reviewed and it should be 50 per cent more than the weighted average cost of production.

Yadav also said the committee believes that while calculating the costs, the farmers himself should be considered as a skilled worker, and his wages should be calculated equal to that of a skilled labour.

The committee notes that, government's price policy for agriculture commodities seeks to ensure remunerative prices to the growers for their produce with a view to encouraging higher investment and production and to safeguard the interest of consumers by making available supplies at reasonable prices.

Towards this end, the government announces each season Minimum Support
Prices for major agriculture commodities and organises purchase operations through public and cooperative agencies.

``To help raise the agricultural growth rate from 2.3 per cent to 4 per cent, the MSP should be announced well before the sowing seasons which help the farmers to decide which crop they should grow, said Yadav and added, the government can play a major role in increasing or decreasing the new sown area of any crop. This will also help in determining the market prices.

The committee is also of the opinion that in order to balance the interest of farmers as well as consumers, the procurement price of the government may be kept at higher level than the MS, so that the market remains stable and the farmers also get a good price of their produce.

Along many recommendations, committee strongly feels that the bonus should from the part of MSP itself and should not be announced separately for government procurement purposes.

To offset the higher price of procurement, the government may give subsidy to the consumers through public distribution system. This mechanism may help the farmers in getting a higher price depending on the market situation at the time of harvesting.
Commodity Online