The government has decided not to include any more crops under the minimum support price (MSP) list for the time being, owing to increasing pressure of rising MSPs on subsidy burden of the government and food prices.
While it was a recommendation of the ministry of agriculture in its national policy for farmers, the cabinet secretary recently held meeting with all ministries concerned to work out an action plan for agriculture development. The meeting had been called at the behest of the prime minister as a run-up for preparing the agriculture survey and an action plan for agriculture.
The agriculture survey will be a parallel document to the economic survey presented during the Budget.
Meanwhile, the ministry of agriculture has been asked to give its recommendations for the Budget, which could supplement the action plan agenda, said officials.
“The ministry wanted to take up most of its recommendations based on the national policy for farmers. Cabinet officials are of the view that most of the recommendations have to be kept on hold due to increasing inflationary pressures on food prices and subsidy burden on the government.
The ministry will work out recommendations that are more medium-term in nature and not short-term, to avert the inflationary pressures, said an official source.
Based on the recommendations of the national policy for farmers, the ministry of agriculture has been advocating review of the methodology for arriving at the MSP for crops and to cover more crops. Other demands raised in the inter-ministerial meeting included ensuring timely supply of fertiliser, water and power, besides a strong pitch for rise in diesel subsidy for farmers.
Citing inflation and rising food prices to be a priority for the national agenda, the Cabinet has also decided not to adopt any changes in the methodology adopted by the Commission for Agriculture Costs and Prices for calculating MSP, for the time being .
The national policy for farmers, a vision document of the ministry of agriculture, had suggested MSP to be worked out as a 50 per cent mark-up over the weighted average cost of production in general.
The government recently fixed MSP for rabi crops of the 2011-12 season which was 20-25 per cent higher than last year, barring wheat, amid concern raised by the food ministry on the impact of MSP on rising food prices and consequent inflation.
