What is MSP?
§ About:
§ The MSP is the rate at which the government
purchases crops from farmers, and is based on a calculation of at least
one-and-a-half times the cost of production incurred by the farmers.
§ MSP is a “minimum price” for any crop
that the government considers as remunerative for farmers and hence
deserving of “support”.
§ Crops under MSP:
§ The Commission for Agricultural Costs &
Prices (CACP) recommends MSPs for 22 mandated crops and fair
and remunerative price (FRP) for sugarcane.
·
CACP is an attached office
of the Ministry of Agriculture and Farmers Welfare.
§ The mandated crops include 14 crops of the
kharif season, 6 rabi crops and 2 other commercial crops.
§ In addition, the MSPs of toria and de-husked
coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra,
respectively.
§ Three Kinds of Production Cost:
§ The CACP projects three kinds of production cost
for every crop, both at state and all-India average levels.
·
‘A2’: Covers all paid-out costs directly incurred by
the farmer in cash and kind on seeds, fertilisers, pesticides, hired labour,
leased-in land, fuel, irrigation, etc.
·
‘A2+FL’: Includes A2 plus an imputed value of unpaid
family labour.
·
‘C2’: It is a
more comprehensive cost that factors in rentals and interest forgone on owned
land and fixed capital assets, on top of A2+FL.
§ CACP considers both A2+FL and C2 costs while
recommending MSP.
·
CACP reckons only A2+FL
cost for return.
·
However, C2 costs are used
by CACP primarily as benchmark reference costs (opportunity costs) to see if
the MSPs recommended by them at least cover these costs in some of the major
producing States.
§ The Cabinet Committee on Economic Affairs (CCEA)
of the Union government takes a final decision on the level of MSPs and other
recommendations made by CACP.
Current News
Recently,
the Centre has approved the Minimum Support Prices (MSP) for
the Khari season 2022-23, stating that the rates are at
least 1.5 times of the weighed average cost of production.
§ The rates for 14 Kharif crops have been increased, the hikes ranging from 4% to 8%.
The maximum hike has been
given in sesamum at Rs 523 per quintal, while the lowest Rs
92 per quintal is in case of maize. In percentage terms, the maximum
increase is in soybean MSP at 9%, while support price of bajra
has been raised by 4% for this year. "Government has increased the MSP of
kharif crops for 2022-23, to ensure remunerative prices to the growers for
their produce and to encourage crop diversification,"
|
CROP |
Increase in MSP rs/Quintal |
MSP 2022-23 (RS/QUINTAL) |
|
Paddy
(common) |
100 |
2040 |
|
Paddy
(grade A) |
100 |
2060 |
|
Jowar
(hybrid) |
232 |
2970 |
|
Jowar
(Maladandi) |
232 |
2990 |
|
Bajra |
100 |
2350 |
|
Ragi |
201 |
3578 |
|
Tur |
300 |
6600 |
|
Moong |
480 |
7755 |
|
Urad |
300 |
6600 |
|
Groundnut |
300 |
5850 |
|
Sunflower
seed |
385 |
6400 |
|
Soyabean
(yellow) |
350 |
4300 |
|
Sesamum |
523 |
7830 |
|
Nigerseed |
357 |
7287 |
|
Maize |
92 |
1962 |
|
Cotton
(medium staple) |
354 |
6080 |
|
Cotton
(long staple) |
355 |
6380 |
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