NEWS – The Union Cabinet has increased the Minimum Support Price (MSP) for 14 kharif (summer) crops, which includes paddy.

HIGHLIGHTS

• Based on the recommendations by the Commission for Agricultural Costs and Prices (CACP).
• For paddy, ragi, bajra, jowar, maize, and cotton.
• The MSP increase follows the policy decision in the 2018 Union Budget that MSP should be at least 1.5 times the cost of production.

Significance of the Increase

• Surplus Rice Stocks: The hike comes despite surplus rice stocks held by the government.
• Political Context: The increase is significant ahead of elections in states like Haryana, Maharashtra, Jharkhand, and Delhi.
• Farmers’ Protests: Farmers, especially from Haryana and Punjab, have been demanding guaranteed MSP for farm products.

MINIMUM SUPPORT PRICE (MSP)

• Definition: MSP is a government-supported price policy ensuring farmers receive a fair price for their crops.
• Purpose: It serves as a safety net against market fluctuations, guaranteeing a minimum price for agricultural produce.
• Timing: Announced before the sowing season, MSP provides price certainty and income security to farmers.
• Establishment: 1966-67.
• Ministry: Ministry of Agriculture.
• Key Figures:
  • Discoverer: K Jha Committee.
  • Father of MSP: Dr. Frank W Parker.

MSP Crops List

• Kharif Crops (14): Paddy, Bajra, Jowar, Maize, Arhar (Pigeon Pea), Ragi, Moong (Green Gram), Groundnut-in-shell, Urad (Black Gram), Soyabean, Niger seed, Sunflower, Sesamum, Cotton.
• Rabi Crops (6): Barley, Wheat, Gram, Rapeseed/Mustard seed, Masur (Lentil), Jute.
• Other Commercial Crops (2): Copra, Safflower.
• Special Cases:
  • Sugarcane: Fair and Remunerative Price (FRP) determined by the Department of Food & Public Distribution.
  • Toria and De-Husked Coconut: MSP determined based on Rapeseed/Mustard seed and Copra, respectively.