Union budget 2018 has proposed a hike in Minimum Support Price (MSP) for Kharif crops.
The government is yet to clarify whether the MSP formula is in lines with the recommendation National commission on Farmers.
What are the recent announcements on MSP?
Minimum Support Price is the price at which government purchases crops from the farmers, whatever may be the market price of the crops.
Union Budget 2018 announced to keep the Minimum Support Price (MSP) for all unannounced Kharif crops at least at 1.5 times of the production cost.
As of now the hike has been announced only for Kharif crops, other crops such as paddy or millets are yet to get nod in this regard.
Government has also assured that if income is less than the support price, that it will make efforts to buy the surplus produced by the farmers.
What is the MSP formula recommended by NCF?
Union government constituted National Commission on Farmers in 2004, which was headed M.S. Swaminathan.
The Commission for Agricultural Costs and Prices (CACP), gives three definitions of production costs: A2, A2+FL and C2.
A2 costs - It basically cover all paid-out expenses, both in cash and in kind, incurred by farmers on seeds, fertilisers, chemicals, hired labour, fuel, irrigation, etc.
A2+FL costs - It cover actual paid-out costs plus an imputed value of unpaid family labour.
C2 costs - These costs are more comprehensive, accounting for the rentals and interest forgone on owned land and fixed capital assets respectively, on top of A2+FL.
The M.S. Swaminathan Committee report had recommended a minimum support price of 50% profits above the cost of production classified as ‘C2’ by the CACP.
What are the other announcements on farmer’s welfare?
Budget provides for greater use of clean and renewable energy sources.
There is an increased allocation for building warehouses and upgrading 22,000 ruralhaats (markets) into Grameen Agricultural markets.
National Bamboo Mission to enhance the cultivation and consumption of bamboo products is to be restructured.
Decision to integrate fisheries and animal husbandry with Kisan Credit Cards has also been taken.
