Centre constitutes committee to look into issue of MSP

Context

The Union Government has set up a committee to look into issues related to agriculture, including making the Minimum Support Price more effective and transparent, crop diversification and natural farming.

Key-highlights

• Former Agriculture Secretary Sanjay Agrawal will head the committee 
• It has also 26 members including farmer representatives.
• The committee will hold discussions on
  • suggestions to make available MSP to the farmers by making the system more effective and transparent
  • suggestions on practicality to give more autonomy to Commission for Agricultural Costs and Prices (CACP) and measures to make it more scientific
  • to strengthen the agricultural marketing system as per the changing requirements of the country to ensure higher value to the farmers through remunerative prices of their produce by taking advantage of the domestic and the export opportunities.
    

About Minimum Support Price (MSP) 

• The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one-and-a-half times the cost of production incurred by the farmers.
• The Commission for Agricultural Costs & Prices (CACP) recommends MSPs for 22 mandated crops and fair and remunerative price (FRP) for sugarcane.
• CACP is an attached office of the Ministry of Agriculture and Farmers Welfare.
• The mandated crops include 14 crops of the kharif season, 6 rabi crops and 2 other commercial crops.
• In addition, the MSPs oftoria and de-husked coconut are fixed on the basis of the MSPs of rapeseed/mustard and copra, respectively.

Factors for Recommending the MSP

• The CACP considers various factors while recommending the MSP for a commodity, it considers following factors: