Prop review

Panel set up to study MSPs

Published: Tuesday 15 July 2003

the Union ministry of agriculture has set up an expert committee to reassess the current method of fixing minimum support price (msp) for kharif, rabi, sugarcane and jute crops. There has been a long-felt need for an upward revision in the existing msps in view of the changing external environment spawned by economic liberalisation.

The msp is meant to protect farmers from price fluctuations. "The factors taken into account while fixing the msp need to be reconsidered, given the current agricultural scenario in the country," states T Haque, acting chairperson, Commission for Agricultural Costs and Prices (cacp). The commission calculates and recommends the msp. Another important aspect is the implementation of msp, points out Haque, adding: "We fix the price for all states, but procurement takes place only in Punjab and Haryana. In other states, distress sale is resorted to."

"The panel will try to harmonise tariff and credit policy with the agricultural policy," reveals Y K Alagh, chairperson of the expert panel. Its report is expected within six months.

At present, harvesting and marketing costs are not included while calculating the cost of cultivation. However, farmers have been rallying to get them included. The panel will suggest whether the cost of transportation, marketing, processing and storage should be taken into account while determining the msp.

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