Farmer groups want CACP to declare MSP at 50% above C2 production cost

Presently, MSPs are fixed at 50 percent more than the A2+FL cost of production

Farmer groups recently met with the Commission for Agriculture Costs and Prices (CACP) in New Delhi and demanded that the Minimum Support Prices (MSPs) be set at 50 per cent more than the comprehensive cost of production (C2) instead of the existing A2+FL cost.

Currently, MSPs are fixed at 50 per cent more than the A2+FL cost of production. A2+FL cost of production includes all paid-out expenses, both in cash and kind, along with the derived value of unpaid family labour. The comprehensive cost (C2) includes all paid-out expenses, the imputed value of unpaid family labor, rentals, and interest foregone on owned land and fixed capital.

 

Left-leaning All India Kisan Sabha (AIKS), which participated in the meeting, requested a white paper from CACP. They believe that less than 10 per cent of the farmers benefit from the MSP, and a guaranteed procurement system across the country is non-existent, the farmer groups said in a statement.

They also suggested the establishment of a price stabilisation fund through contributions from corporations, they said.

The Bhartiya Kisan Union (apolitical), which is a breakaway faction of the original BKU, also requested that MSPs be fixed at 50 per cent over the C2 cost of production, the statement said.

They proposed that states where production costs are higher than the national average should receive compensation, and losses due to climate change should be factored into the calculation of production costs. They also suggested the MSP regime be expanded to include more crops, including vegetables, it said.

Curbing food inflation

The government in an order issued late last night has approved limited imports of maize, crude sunflower oil, refined rapeseed oil, and milk powder under the tariff-rate quota (TRQ) to control food inflation.

Importers will pay nil or lower duty to bring down food inflation.

India is a major importer of vegetable oils and a leading producer of milk. The imports of specified quantities of these items will be facilitated by state-run bodies, cooperatives, and companies.

However, industry players in the edible oils and milk sectors have expressed reservations about the necessity and impact of these imports.