Every year, Msps are announced for 23 crops.
Governments and market economists argue that Msps have increased over the years.
To ensure remunerative prices to cotton farmers,
Government fixes Minimum Support Prices(Msps) of seed cotton(kapas) every year.
He noted that Msps of some crops are already 50 per cent higher than the cost of production.
A part of the increase in Msps based on historical trends was already
included in the June baseline projections.
As such, only the incremental increase in Msps over the average increase in the past will impact inflation projections.
It refused to either hike(or add to) the Minimum Support Prices(Msps)
or increase procurement by setting up widely distributed procurement centres.
Secondly, available data suggest that the
effect of revision in minimum support prices(Msps) announced in July on prices has been subdued so far.
The centre significantly raised Msps in July to ensure 50% returns over costs
and followed it up with a new procurement mechanism named PM-AASHA.
A lot of Msps are starting to focus more on security
because of the attention it is getting in the media and, ultimately, from their existing customers.
The Cabinet Committee on Economic Affairs(CCEA) chaired by Prime Minister Narendra Modi
approved the increase in the Minimum Support Prices(Msps) for all kharif crops for 2019-20 Season.
Accordingly, Government has increased the Minimum Support Prices(Msps) for all notified Kharif,
Rabi and other commercial crops with a return of at least 50 percent of cost of production for the season 2018-19.
Third, the Union Budget
2018-19 has proposed revised guidelines for arriving at the minimum support prices(Msps) for kharif crops,
although the exact magnitude of its impact on inflation cannot be fully assessed at this stage.
It has tried to address farm distress by
announcing higher minimum support prices(Msps) for about 23 major commodities in 2018-19,
but in the absence of a large scale procurement mechanism by the government, the market prices for most commodities have remained 10-30 percent below the announced Msps.
MSP: It has tried to address farm distress by
announcing higher minimum support prices(Msps) for about 23 major commodities in 2018-19,
but in the absence of a large scale procurement mechanism by the government, the market prices for most commodities have remained 10-30% below the announced Msps.
Facing elections,
the Centre had woken up to woo farmers with steep hike in Msps twice since June and the new procurement policies
are more visible in the electorally important states in the north and central regions, while other states are only seeing patchy efforts, says a report.