Commission for Agricultural Costs and Prices Current Affairs - 2019
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The Delhi government has decided to introduce the Minimum Support Price (MSP) for farmers based on the recommendations of the National Commission on Farmers (NCF) headed by MS Swaminathan.
Swaminathan Committee recommendations on MSP
The National Commission on Farmers (NCF) was constituted on November 18, 2004 under the chairmanship of Professor M.S. Swaminathan. The committee made some key recommendations on land reforms, irrigation, credit and insurance, food security, employment, the productivity of agriculture and farmer competitiveness.
On the issue of MSP, the committee recommended providing farmers with a minimum support price at 50 per cent profit above the cost of production classified as C2 by the Commission for Agricultural Costs and Prices (CACP).
Production costs in Agriculture
The Commission for Agricultural Costs and Prices (CACP) proposes three definitions of production costs in agriculture. They are:
- A2: It is the actual paid-out expenses incurred by farmers — in cash and kind on seeds, fertilisers, pesticides, hired labour, fuel, irrigation and other inputs from outside.
- A2+FL: It includes A2 cost plus an imputed value of unpaid family labour.
- C2: It accounts for the rentals or interest loans, owned land and fixed capital assets over and above A2+FL.
The Swaminathan Committee recommended the MSP to be basic cost and prescribed MSP 50 per cent above C2.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi has given its approval for increase in Minimum Support Price (MSP) for Raw Jute for 2018-19 season. The MSP for Fair Average Quality (FAQ) of Raw Jute was increased to Rs.3700 per quintal for 2018-19 season from Rs. 3500 per quintal in 2017-18 season.
The increased MSP was based on recommendations of Commission for Agricultural Costs and Prices (CACP) which had taken into account cost of production, overall demand-supply, domestic and international prices before recommending MSP for Raw Jute.
The increased MSP of Raw Jute is expected to ensure appropriate minimum prices to farmers and step up investment in Jute cultivation and thereby production and productivity. The Jute Corporation of India (JCI) will continue to act as Central Nodal Agency to undertake price support operations at MSP in Jute growing states.
Minimum Support Price (MSP)
MSP is form of agricultural market intervention undertaken by Central Government in order to insure agricultural producers are protected against any sharp fall in farm prices. It is announced for certain crops by Central Government prior to sowing season.
Its purpose is to incentivize cultivators to adopt modern technology and raise productivity and overall production in line with the emerging demand patterns in the country. The prices are decided by CCEA on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).
Commission for Agricultural Costs and Prices (CACP)
CACP is an expert body which recommend MSPs on various crops to Central Government (CCEA) by taking into account cost of production, trends in domestic and international prices. It is an attached office of the Ministry of Agriculture and Farmers Welfare. It came into existence in January 1965. Currently, CCEA comprises Chairman, Member Secretary, one Member (Official) and two Members (Non-Official). The non-official members are representatives from farming community and usually have active association with farming community.