Mains Paper 3: Economy
Prelims level: MSP
Mains level: Agricultural related issues like MSP
• One factor that is being flagged by analysts is farm distress.
• Farmers across the country are not happy with what has happened to their incomes and this is increasingly getting reflected in their protests.
• The Union minister for agriculture had earlier described these protests, and farmers spilling milk and dumping onions on roads, as “political drama”.
• The government’s latest big ticket announcement on agriculture was that of MSPs of kharif crops at 50 per cent margin over cost A2+FL.
• The government is not capable of procuring large quantities of as many as 23 commodities for which the MSPs were announced.
• Higher MSPs, without an adequate procurement mechanism and storage and distribution facilities, will not solve the farmers’ problems. The government cannot procure all agri-commodities.
• Supply side reforms — technological improvements and water management — to boost productivity in a sustainable manner will take time.
• They are announcing loan waiver schemes cost the nation Rs 4 to 5 lakh crore.
Systematic changes and a stable policy is the need of the hour.
• In this context, one may look at Telangana’s Rythu Bandhu scheme under which the government gives Rs 4,000 per acre (that is, about Rs 10,000/ha) as investment support to farmers before every sowing season.
• The money should be directly deposited into the farmers’ accounts, linked with their Aadhaar number, and the information sent to their mobile phones through an sms.
• Another classic example is the slogan of doubling farmers’ real incomes by 2022-23.
• This means raising real incomes of farmers by almost 13 per cent per annum in the next five years, when during 2002-03 to 2015-16, these incomes increased by just 3.6 per cent per annum.
• This is like promising to raise the overall GDP growth of the country from, say, 7 per cent today to 20 per cent in the next five years.
• What is good for the country and how it can be achieved in the best possible manner should be the key criteria for policy making.
• Short-term interests must be in sync with the medium to long-term agenda for agri-reforms.
Q.1) Consider the following statements with regard to Minimum Support Price (MSP) in India
1. MSP is announced by government is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP)
2. Cereals , Pulses and Oilseeds are covered under MSP
Select the correct code
a) 1 only
b) 2 only
c) Both 1 and 2
d) Neither 1 nor 2
Q.1) What is good for the country and how it can be achieved in the best possible manner should be the key criteria for policy making?