New Delhi: Even farm unions are pitching in legal guarantee Up to Minimum Support Price (MSP), experts In Government say that legalization MSP 23. to purchase crops will interrupt Market balance, drive out private trade, and promote inflation and decline in agricultural exports.
the officials were afraid that farmers will actually hit and be quoted NITI AayogThe Working Paper on Agricultural Reforms argues that liberalized markets were more conducive to growth than government support and intervention in the market over a period of time.
NITI Aayog member Ramesh Chand noted in the paper that sectors such as horticulture, milk and fisheries (where market intervention by the government is either nil or very little) saw 4-10% annual growth, while the growth rate in cereals , where MSP and other interventions are significantly higher, remained at 1.1% after 2011-12. In addition, there is a peak of benefits with cereals.
Chand cited the example of Maharashtra, where an experiment of legal intervention to ensure MSP failed in 2018, forcing the state government to abandon the initiative. “Economic theory as well as experience shows that a price level that is not supported by demand and supply cannot be sustained by legal means,” said Chand, an agricultural economist.
However, he kept the forum open for suggestions and said that if MSP is ensured to the farmers as per the legal or mandated situation, it would be the easiest way for any government to help the farmers to get the desired price. This can be done by state governments without central intervention, he said and cited the example of Kerala, where the state government had announced minimum prices for 16 fruits and vegetables last year.
The paper, cited extensively by officials in the ministry, also cited the example of sugarcane – where the support price (fair and remunerative price) is the statutory minimum price – and pointed to the accumulation of thousands of crores in arrears in the form of private sugar mills. did. Could not find FRP for sugarcane matching with sugar prices.
Noting the practical difficulties in getting the private sector on board to procure at the legally guaranteed MSP, officials said higher procurement costs would mean a rise in food prices, leading to inflation, which would ultimately affect the poor. .
“It will also affect India’s agricultural exports, which account for 11% of total exports of commodities, if the MSP is higher than the prevailing rates in international markets,” officials said. He also said that since the government would have to procure all the marketable surplus in the absence of private participation, it would put a heavy burden on the exchequer.
Officials did not back up their claims with specific figures, but farmers said the government would spend no more than an “extra amount” of Rs 1 lakh crore annually if it decided to buy the entire marketable surplus.
the officials were afraid that farmers will actually hit and be quoted NITI AayogThe Working Paper on Agricultural Reforms argues that liberalized markets were more conducive to growth than government support and intervention in the market over a period of time.
NITI Aayog member Ramesh Chand noted in the paper that sectors such as horticulture, milk and fisheries (where market intervention by the government is either nil or very little) saw 4-10% annual growth, while the growth rate in cereals , where MSP and other interventions are significantly higher, remained at 1.1% after 2011-12. In addition, there is a peak of benefits with cereals.
Chand cited the example of Maharashtra, where an experiment of legal intervention to ensure MSP failed in 2018, forcing the state government to abandon the initiative. “Economic theory as well as experience shows that a price level that is not supported by demand and supply cannot be sustained by legal means,” said Chand, an agricultural economist.
However, he kept the forum open for suggestions and said that if MSP is ensured to the farmers as per the legal or mandated situation, it would be the easiest way for any government to help the farmers to get the desired price. This can be done by state governments without central intervention, he said and cited the example of Kerala, where the state government had announced minimum prices for 16 fruits and vegetables last year.
The paper, cited extensively by officials in the ministry, also cited the example of sugarcane – where the support price (fair and remunerative price) is the statutory minimum price – and pointed to the accumulation of thousands of crores in arrears in the form of private sugar mills. did. Could not find FRP for sugarcane matching with sugar prices.
Noting the practical difficulties in getting the private sector on board to procure at the legally guaranteed MSP, officials said higher procurement costs would mean a rise in food prices, leading to inflation, which would ultimately affect the poor. .
“It will also affect India’s agricultural exports, which account for 11% of total exports of commodities, if the MSP is higher than the prevailing rates in international markets,” officials said. He also said that since the government would have to procure all the marketable surplus in the absence of private participation, it would put a heavy burden on the exchequer.
Officials did not back up their claims with specific figures, but farmers said the government would spend no more than an “extra amount” of Rs 1 lakh crore annually if it decided to buy the entire marketable surplus.
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