MINIMUM SUPPORT PRICE - ECONOMY
News: Govt. hikes kharif MSP; farmers demand more
What is in the news?
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The Union Cabinet has
approved the Minimum Support Prices for the kharif crops.
Key details from the news:
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The 2023-24 MSPs for 17
kharif crops and variants were approved at a meeting of the Cabinet Committee
on Economic Affairs.
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The government is fixing
MSP from time to time based on the recommendations of the Commission for
Agricultural Costs and Prices.
|
Kharif crops: ● Rice,
maize, jowar, bajra, tur, moong, urad, cotton, jute, groundnut, soyabean etc. |
Minimum Support Price:
●
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.
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The Commission for Agricultural Costs & Prices (CACP) recommends
MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
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Final
decision will be taken by the Cabinet Committee on Economic Affairs.
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Prices are fixed based on
A2+FL method and are 50% above the cost
of production.
|
Crops covered under MSP: ● Cereals
(7) - paddy, wheat, barley, jowar, bajra, maize and ragi ● Pulses
(5) - gram, arhar/tur, moong, urad and lentil ● Oilseeds
(8) - groundnut, rapeseed/mustard, toria, soyabean, sunflower seed, sesamum,
safflower seed and niger seed ● Raw
cotton ● Raw jute ● Copra ● De-husked
coconut ● Sugarcane
(Fair and Remunerative Price) ● Virginia
flue cured (VFC) tobacco |
Factors to decide MSP:
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Cost of production
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Changes in input prices
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Input-output price parity
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Trends in market prices
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Demand and supply
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Inter-crop price parity
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Effect on industrial cost
structure
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Effect on cost of living
●
Effect on general price
level
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International price
situation
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Parity between prices
paid and prices received by the farmers.
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Effect on issue prices
and implications for subsidy.