Daily Current Affairs : 17-October-2024
The Indian government has recently approved an increase in the Minimum Support Prices (MSP) for six major Rabi crops for the 2025-26 marketing season. These crops are vital for the country’s agricultural economy and the welfare of farmers. The increase in MSP aims to ensure that farmers receive a fair price for their produce and encourage the production of essential crops.
Crops Affected by the MSP Revision
The crops that have seen an increase in MSP include:
- Wheat
- Rapeseed & Mustard
- Lentil (Masur)
- Barley
- Gram
- Safflower
These crops are crucial for food security, as well as for the agricultural income of millions of farmers across India. The MSP revision is expected to benefit farmers by ensuring they receive a better return on their investment.
What is the Minimum Support Price (MSP)?
The Minimum Support Price (MSP) is a safety net provided to farmers. It guarantees a minimum price for their produce when it is purchased by the government. This system helps to stabilize farmers’ incomes and shields them from price fluctuations in the open market.
Determination of MSP
The MSP for each crop is decided by the Commission for Agricultural Costs and Prices (CACP). The CACP takes several factors into account, such as:
- Cost of production: How much it costs farmers to grow the crop.
- Market demand and supply: How much the crop is in demand and how much is being produced.
- Market trends: Current price trends in the agricultural markets.
The CACP’s recommendations are then presented to the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister, who makes the final decision.
Types of Production Costs Considered by CACP
To determine the MSP, CACP considers different types of production costs:
- A2: Direct costs like seeds, fertilizers, and labor.
- A2+FL: Includes family labor costs, which are unpaid but contribute to the production process.
- C2: The total cost, including rent for land and the opportunity cost of capital, which is used as a benchmark for setting the MSP.
The Objective Behind Setting MSP
The MSP is designed to ensure that farmers get a fair return for their labor and investment. According to the Budget 2018-19, the MSP is set at 1.5 times the all-India weighted average cost of production. This means that farmers should receive at least one and a half times the cost of production for each crop, which is a crucial step toward making farming a more sustainable livelihood.
Important Points:
- Recent MSP Revision: The Indian government has approved an increase in the Minimum Support Prices (MSP) for six Rabi crops for the 2025-26 marketing season:
- Wheat
- Rapeseed & Mustard
- Lentil (Masur)
- Barley
- Gram
- Safflower
- Purpose of MSP: MSP guarantees farmers a minimum price for their produce, ensuring a stable income and protection against market fluctuations.
- MSP Determination: The Commission for Agricultural Costs and Prices (CACP) recommends MSP based on:
- Cost of production
- Market demand and supply
- Market trends
- Approval Process: The final decision on MSP is made by the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister.
- Crops Covered by MSP: MSP is announced for 22 crops, including 14 Kharif crops, 6 Rabi crops, and 2 commercial crops. Fair Remunerative Price (FRP) is set for sugarcane.
- Types of Production Costs:
- A2: Direct costs like seeds, labor, and fertilizers.
- A2+FL: Includes unpaid family labor.
- C2: Comprehensive cost, including rent and capital interest, used as a benchmark.
- Budget 2018-19: MSP is set at 1.5 times the all-India weighted average cost of production to ensure fair returns for farmers.
- Objective of MSP: The increase in MSP aims to improve farmers’ income, encourage crop production, and provide financial stability in agriculture.
Why In News
The Indian government has recently approved an increase in the Minimum Support Prices (MSP) for six Rabi crops for the 2025-26 marketing season, aiming to enhance the income of farmers and ensure fair returns for their produce. This decision is part of the government’s ongoing efforts to support the agricultural sector and address the challenges faced by farmers in the face of fluctuating market prices.
MCQs about Recent Increase in MSP for Rabi Crops
-
Which of the following crops is NOT included in the recent MSP revision for the 2025-26 marketing season?
A. Wheat
B. Rice
C. Barley
D. Gram
-
Who recommends the Minimum Support Prices (MSP) for agricultural crops in India?
A. Prime Minister
B. Cabinet Committee on Economic Affairs (CCEA)
C. Commission for Agricultural Costs and Prices (CACP)
D. Ministry of Agriculture
-
What is the main goal behind setting the Minimum Support Price (MSP) for crops?
A. To increase the demand for crops
B. To ensure farmers get a minimum price for their produce
C. To promote export of agricultural products
D. To reduce the production costs for farmers
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According to the Budget 2018-19, how is the MSP set in relation to the cost of production?
A. Equal to the average cost of production
B. 1.5 times the all-India weighted average cost of production
C. Half the cost of production
D. Based on the global market price
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