The Minimum Support Price (MSP), considered to be an important tool of the Centre’s pricing policy for agricultural crops, has helped to raise the level of income of paddy farmers in Orissa but has failed to make other crops remunerative.
The inference is drawn from a recent study conducted by the city-based Centre for Youth and Social Development (CYSD) in association with Knowledge Consultancy Services, another city-based organisation.
The study was conducted in three districts of Orissa- Cuttack, Koraput and Sundergarh.
“The MSP has been asymmetric in terms of crops as well as regions. It has been highly favourable to rice and wheat production and has resulted in shifting of good quality land and resources from other crops to rice and wheat”, said Bidyadhar Moharana, resource person of Knowledge Consultancy Services.
It has also been established that the area under paddy cultivation has gone up in the three districts under the impact of the MSP, he added.
The study also pointed out that the MSP has largely benefited the big farmers in the three districts, leaving the small and marginal farmers high and dry. The objective of the study was to focus on the effectiveness of the MSP and its impact on different categories of farmers.
While a big farmer sold about 45 quintals out of an average production of 112 quintals of paddy at MSP, a small farmer sold only 8.13 quintals out of the total production of 44.52 quintals.
The figure was worse for the marginal farmer, who out of an average production of 15.8 quintals, sold only 0.10 quintal at MSP. This low offtake of paddy at MSP for the small and marginal farmers in the three surveyed districts of Orissa is despite the fact that 61.7 per cent of the farmers are aware of the support price mechanism.
“A major quantity of surplus paddy is sold to the miller agents rather than to government procuring agencies at MSP. Some village panchayats in the three districts do not have purchase centres and the farmers are not inclined to travel to far off procuring centres”, said Moharana.
He pointed out that MSP if declared before the sowing season can become an effective tool of price policy and can provide the floor level price for the crops under consideration.
“There should be a thorough review of the methodology of arriving at the MSP through consultation with the farm leaders and the academicians. Such a review should be taken periodically and it needs to be transparent in nature”, he added.
MSP for paddy for 2008-09 stands at Rs 1,080 per quintal plus a bonus of Rs 50 while the MSP of wheat is Rs 1,080 per quintal. MSP covers 25 crops across the country but in Orissa it is applicable to only four agricultural crops- paddy, maize, cotton and ragi.
Speaking on the occasion, PK Sahoo, chairman, CYSD said, “The farmers in Orissa are not getting the credit on time from the banks and different cooperative societies. All the facilities need to be made available to the farmers to ensure that they get the right price realisation for their crops.”
