Policy ensuring MSP 50% higher than production cost to come soon

National Fertilizers | The sale of sulphur based fertilizers of company - Bentonite Sulphur has registered a growth of 237 percent and SSP has registered growth of 133 percent over the CPLY in April-October 2020 YoY. (Image: Reuters)

The government will soon come out with a policy to ensure that farmers get the support price 1.5 times higher than the production cost, Agriculture Minister Radha Mohan Singh said today.

Government think tank Niti Aayog has come out with a draft policy after discussion with states and it will be finalised soon after further deliberations, he added.

The minister promised that the notified crops whose minimum support price (MSP) is not 50 per cent higher than the cost of production will see an upward revision before the 2018-19 kharif season starting June.

He noted that MSPs of some crops are already 50 per cent higher than the cost of production.

In Budget 2018-19, the government had announced fixing MSP 1.5 times higher than the cost of production. The centre fixes MSP of 22 agri-commodities.

Singh assured farmers that the government will intervene when prices fall below MSP and protect their interest even if it hurts the government exchequer.

"It is true, it will put burden on exchequer. The prime minister is not worried about the exchequer. ...The country's farmers and labours have first right over the government exchequer," he said at a Ficci event.

Holistic efforts are being made to reduce the cost of production as also strengthen market and post production infrastructure to achieve the target of doubling farmers' income by 2022, he said.

Stating that MSP is just a safety net and the government is taking steps to put in place a competitive agri-market, National Rainfed Area Authority (NRAA) CEO Ashok Dalwai said remunerative price is not MSP, it is more than MSP. "We should not get stuck with MSP. MSP is the last resort. It is a social safety net. Farmers have to be offered a chance to discover prices," he said.

Dalwai said while the production has gone up, the biggest challenge is marketing. Therefore, the focus is on strengthening 'gramin haats' for the benefit of small and marginal farmers as announced in the Budget, he said.

That apart, the centre has drafted 'The Agricultural Produce and Livestock Marketing (Promotion and Facilitation) Act, 2017' as model for states to adopt. This model provides for progressive agricultural marketing reforms, including setting up markets in private sector, direct marketing, farmer-consumer markets, de-regulation of fruits and vegetables, e-trading, among others.

The government is also drafting a contract farming law, which will be finalised soon after taking public comments, he added.