The new MSP announced on Wednesday is on only Kharif crop for kharif marketing season beginning in 14 kharif (summer-sown) crops for the 2018-19 marketing season for October month.  Union home minister Rajnath Singh after its approval from the Cabinet committee on economic affairs announced the hike in MSP of 14 kharif crops. It was BJPs promise to farmers to provide benefit in the kharif season, which was found to be accomplished with huge success specially in millet, which will provide 50% profit over their cost of production for all the notified crops. 

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The announcement comes against the backdrop of the political imperative to fulfill the commitment to improve the deal for farmers ahead of the crucial round of state elections and the 2019 battle for the control of the Lok Sabha. 

Among nutri-cereals, Rs 525 has increased the MSP of Bajra per quintal, jowar (hybrid) by Rs 730 per quintal and ragi by Rs 997 per quintal in absolute terms as compared to the support price of 2017-18. However, the highest percentage increase in MSP over the previous year is seen by ragi (52.5%). As far as returns over the cost of production are concerned, bajra farmers will get the highest profit of 97%.

Interestingly, less-water-consuming and climate-resilient millets (jowar, bajra and ragi) — recently notified by the government as “nutri-cereals” due to their very high nutritional value — got substantial hikes as compared to the water-guzzling paddy. As compared to the acreage of paddy (396 lakh hectares), the millets currently cover nearly 120 lakh hectares of land during kharif season — less than one-third of the acreage of paddy. 

The move on millets may help the government politically in the three poll-bound states of Madhya Pradesh, Rajasthan and Chhattisgarh where water-stressed farmers invariably go for cultivation of coarse cereals, but would also be welcomed by those who have been calling for greater support for the producers of coarse grains citing their nutritional value as well as the fact that they are consumed by the “not-so-privileged”. Analysis of new MSP shows that paddy farmers will get a return of 50% over the cost of production, but the ones who opt for bajra (pearl millet) will get nearly 97% returns and those who go for arhar (pulse) will get returns of over 65%.

The larger message of the new MSP regime is to encourage farmers to cultivate pulses, oilseeds and millets. Pulses and millets will ensure nutritional security while more oilseed production will help reduce the import bill. Among nutri-cereals, Rs 525 has increased the MSP of Bajra per quintal, jowar (hybrid) by Rs 730 per quintal and ragi by Rs 997 per quintal in absolute terms as compared to the support price of 2017-18. However, the highest percentage increase in MSP over the previous year is seen by ragi (52.5%). As far as returns over the cost of production are concerned, bajra farmers will get the highest profit of 97%. “This will increase the income of farmers and purchasing capacity, which will have an impact on wider economic activity,” Union home minister Rajnath Singh said. Experts and farm activists, however, flagged the issue of poor procurement and inadequate cost of production formula.

“The much-hyped MSP increase is of little use for farmers unless supplemented with a robust procurement system. Such a system exists only for paddy at the moment and that too in selected states,” said Sudhir Panwar, former member of the UP planning commission. Avik Saha, national convener of the Jai Kisan Andolan, said, “While the announcement sounds grand and farmer-friendly, let us not forget that announcing MSP and not doing anything to ensure that farmers get MSP has become a political tool.”

Both agriculture minister Radha Mohan Singh and food minister Ram Vilas Paswan, however, expressed their confidence on the procurement front. Many farm activists expressed unhappiness over the formula to arrive at the cost of production. They said the government should have considered C2 (comprehensive cost including imputed rent on owned land and interest on value of owned capital assets) formula instead of the A2+FL formula. The A2+FL includes all paid-out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for land, expenses incurred on use of material inputs like seeds, fertilisers, irrigation charges, depreciation on implements, miscellaneous expenses, and imputed value of family labour.



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