CHENNAI: Professor MS Swaminathan on Wednesday said the Central government's approval to hike in the Minimum Support Price (MSP) for Kharif crops was a "welcome first step in the process of overcoming agrarian crisis."
However, he warned that this had to be followed up with a favourable procurement policy to ensure that farmers receive the MSP as well as increasing consumption through the effective implementation of the Food Security Act, school noon meal programmes, and so on. "Higher MSPs are welcome but there is inadequate public procurement at MSP, except in the case of wheat and rice," he said in a statement.
"This is clear from the experience of farmers who cultivated more pulses, on the expectation of procurement but were let down by a crash in market prices. Indeed, for many crops including urad, tur, maize, groundnut, soyabean, bajra, rapeseed and mustard, the weighted average mandi price was below the corresponding MSP before the monsoon." Professor Swaminathan said MSP should be determined using the formula C2 + 50% and that the proposed hike fell short when viewed with this in mind.
"The MSP announced is higher in absolute terms but below the recommended level," he said. "For example, the MSP of common paddy has been hiked from Rs 1550 to Rs 1750 per quintal. Taking the C2 cost of last year (2017-18) and assuming a 3.6 per cent rise in input costs based on the input cost index used by CACP, the estimated C2 cost for this year (2018-19) is Rs 1524. So, the new MSP is C2+15%, not C2+50%."He went on to add that in the case of Ragi, the new MSP was C2+20% while for moong, the MSP was C2+19%.