MSP Increased For Rabi Crop!

MSP Increased For Rabi Crop!: Relevance for UPSC

GS 3: Agricultural Pricing

MSP Increased For Rabi Crop!: Why in news?

• The Cabinet Committee on Economic Affairs chaired by PM Shri Modi has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2023-24.
• The Ministry of Agriculture had recommended an increase in MSP of certain Rabi crops after it received the recommendations from the MSP committee. It was then sent to the Union Cabinet for approval.

MSP Increased For Rabi Crop!: Context

• The increase in MSP for Rabi Crops for Marketing Season 2023-24 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at lease 1.5 times of the All-India weighted average Cost of Production, aiming at reasonably fair remuneration for the farmers.
• The maximum rate of return is 104 percent for rapeseed & mustard, followed by 100 percent for wheat, 85 per cent for lentil; 66 per cent for gram; 60 per cent for barley; and 50 per cent for safflower.

The Editorial Analysis: The price of food must figure in the policy

MSP Increased For Rabi Crop!: MSP Committee

• Notified on July 18, 2022, the committee is tasked to give suggestions on making minimum support price (MSP) more effective and transparent, how to give more autonomy to the Commission for Agricultural Costs and Prices (CACP) and measures to make it more scientific, to strengthen the agricultural marketing system, steps needed to promote natural farming, and crop diversification.
• The committee gives “suggestions to make available MSP to farmers of the country by making the system more effective and transparent.”
• It gives suggestions on “practicality to give more autonomy to the Commission for Agricultural Costs and Prices (CACP) and measures to make it more scientific”.

MSP Increased For Rabi Crop!: What is Minimum Support Price(MSP)?

• The MSP is the rate at which the government buys grains from farmers.
• Reason behind the idea of MSP is to counter price volatility of agricultural commodities due to the factors like variation in their supply, lack of market integration and information asymmetry.
• Fixation of MSP: The MSP is fixed for 23 crops based on the recommendations of the Commission for Agricultural Costs and Prices (CACP), Ministry of Agriculture.

MSP Increased For Rabi Crop!: MSP for all Rabi Crops for Marketing Season 2023-24

• The MSP for wheat has been increased by Rs 110 from Rs 2,015 in 2022-23 to Rs 2,125 in 2023-24 per quintal, while the MSP for barley has been increased by Rs 100 from Rs 1,635 per quintal to Rs 1,735 per quintal.
• The minimum support price for gram has been increased by Rs 105 from Rs 5,230 per quintal to Rs 5,335 per quintal, while safflower MSP has been increased by Rs 209 from Rs 5,441 to Rs 5,650.
• The MSP for rapeseed and mustard has been increased by Rs 400 from Rs 5,050 to Rs 5,450 per quintal.
• The highest increase in MSP has been approved for masur dal, which has increased by Rs 500 from Rs 5,500 to Rs 6,000.

(Rs. Per quintal)

MSP Increased For Rabi Crop!: Increased production & Productivity of Oilseed and Pulses

• From the year 2014-15, there has been a renewed focus on increasing the production of oilseeds and pulses.  The efforts have yielded good results.
• Oilseeds production has increased from 27.51 million tonnes in 2014-15 to 37.70 million tonnes in 2021-22 (4^th advance estimates).  Pulses production has shown similar increasing trend.
• The Seed Minikits programme is a major tool for introducing new varieties of seeds in the farmers’ fields and is instrumental for increasing the seed replacement rate.
• The productivity of pulses and oilseeds have increased substantially since 2014-15.
• In case of pulses productivity has been increased from 728 kg/ha (2014-15) to 892 kg/ha (4^th Advance estimates, 2021-22) i.e. 22.53% increase.  Similarly, in oilseed crops productivity has been increased from 1075 kg/ha (2014-15) to 1292 kg/ha (4^th Advance estimates, 2021-22).

MSP Increased For Rabi Crop!: What GOI is doing to increase Production & Productivity?

• The Government’s priority is on increasing production of oilseeds and pulses and thus fulfilling the objective of Atmanirbhar Bharat.
• The formulated strategies are to increase production through area expansion, productivity through High Yielding Varieties (HYVs), MSP support and procurement.
• Government is also promoting adoption of smart farming methods through the use of technology and innovation in the agriculture sector in the country.
• Government is implementing a Digital Agriculture Mission (DAM), which includes India Digital Ecosystem of Agriculture (IDEA), Farmers Database, Unified Farmers Service Interface (UFSI), Funding to the States on the new Technology (NeGPA), Revamping Mahalnobis National Crop Forecast Centre (MNCFC), Soil health, Fertility and profile mapping.
• Under the NeGPA programme, funding is given to State Governments for Digital Agriculture projects using emerging technologies like Artificial Intelligence and Machine Learning (AI/ML), Internet of Things (IOT), Block chain etc.
• Adoption of drone technologies is being done.
• To promote smart farming, the Government also promotes Startups in the Agriculture sector and nurtures agri-entrepreneurs.

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