Context :
Ø
Review open-ended grain procurement: CACP ….
FE /
19 Oct 2023
Extract :
The Commission for Agricultural Costs and Prices (CACP) has called for a review of the government’s open-ended
grain procurement policy
to restrict rice and wheat purchase from the farmers for the meeting requirement under the
National Food Security Act.
The open ended procurement policy for rice
and wheat has resulted in accumulation of huge stocks of rice and
wheat, and distorts cropping pattern and leads to over exploitation of groundwater, CACP has stated in its report on
price policy for rabi crops for the marketing season (2024-25).
The Food Corporation of India (FCI) and state agencies purchase
around 80 – 85 million tonne (MT) rice and wheat annually from the farmers for
meeting the need under NFSA where 800 million people are provided 5 kg grain
per month free.
Alternatively,
the commission has suggested compensation to the farmers for additional marketed
surplus through Price Deficiency
Payments, where farmers are compensated for the price difference between
average mandi prices in key producing states and the minimum support price
(MSP).
CACP recommends MSP for 23 crops to the government. Based on CACP
recommendation and inputs from the state government, the cabinet approves MSP
of the crop.
In order to enhance domestic production and ensure remunerative
prices to farmers growing pulses and oilseeds, the commission has recommended that the
ceiling for procurement of pulses, in particular, arhar, urad and lentil, where import dependence
is high, should be reviewed.
India imports about 15% of its pulses consumption, especially tur,
urad and lentils.
In order to protect oilseed farmers from adverse impact of import
of edible oils which according to trade estimate is likely to be 17 million
tonne (MT) in 2022-23 oil year (November-October), the commission has
recommended a dynamic tariff structure
linked to world prices, demand
supply situation, domestic prices of edible oils and MSP of oilseeds should
be introduced.
MY TAKE :
Ø Devil is in details……………………………….
09 Dec
2021
Extract :
I urge the Govt to incorporate following in the “ Terms of Reference “ :
Ø MSP for each crop shall be computed,
automatically using a TECHNOLOGY
PLATFORM
Ø Concurrently this technology platform shall also compute
automatically, MPQ ( Maximum
Purchase Quantity ) for each crop
Ø The only INPUT to this
TECHNOLOGY PLATFORM ( from the Central Govt ) , shall be :
“
The overall FOOD BILL shall not exceed XYZ % of last
year’s GDP “
Ø Given such over-arching
CONSTRAINT, platform will generate
a family of MSP vs MPQ projections, for consideration and adoption by the
Committee ( for each crop and for overall )
Ø Committee will accept a particular
COMBINATION ( of MSP and MPQ ) for each crop and recommend its announcement by the Union Agriculture
Minister
Ø This process will be
repeated each year
Ø Committee will have a
STATUTORY standing
Ø Besides involving an
ENLARGED PARTICIPATION of all stake-holders in the process of determining MSP (
for each year ), this will ensure that the Committee feels responsible /
accountable for the implications of its recommendation on the FINANCIAL HEALTH
of entire country
Point :
Counter-Point // MSP : MPQ ………………………………….[ 28 Nov 2021 ]
Extract :
We have following problems :
# Against our current storage
capacity ( FCI ) of 41 million tons, last season, we
were required to purchase 120 million tons of food-grains from
farmers ( at
MSP ) .
This meant storing food grains, in open ( covered by tarpaulins ).
This results
in millions of tons getting damaged (
rain-rats-insects ) and rendered
unfit for
human consumption- entailing a loss of lakhs of
crores of rupees
# We just have enough money ( funds )
to support a few crops with MSP. If as
many as 23 crops were to be guaranteed MSP, we just won’t
have enough
funds to buy out all 23 crops .
# Fixing MSP and guaranteeing
purchase of 23 crops, will further aggravate the
storage problems and consequent damage problem
Dear Kisan Netas / Shri Tomarji,
Here too a Compromise Solution is possible in the
spirit of Give and Take
It is : MSP linked
with MPQ
Where, MPQ = Maximum Purchase Quantity
( separate figure for each of those 23 crops )
This means, in each year, Government shall not be obliged to purchase more than
the MPQ ( at its MSP ), for any crop
The MSP and MPQ shall
be worked out and announced by the govt. 6 months in
advance of the coming year
As suggested in my following earlier
blog-email, it is possible to automate this entire process of
computation of MSP, by using Geo-Spatial Technology :
Agri Reforms : an Ongoing Process…………………….[ 20 Nov 2021 ]
Using same technology, it is possible
to also calculate ( automatically
and without human intervention ),
the MPQ for each of those 23 crops for the upcoming year
Both, the Government and the Farmers
should be happy with such an AUTOMATIC
– SCIENTIFIC – UNBIASED – TECHNOLOGY BASED
– DYNAMIC process, which announces
its results on a Govt website within a specific time - frame
This way, Govt will know in advance, the total amount
of FUNDS that will be required for the coming season
And, knowing in
advance, the MPQ / MSP for each crop, farmers will decide WHICH crop
to plant and HOW MUCH to plant ( Demand / Supply / Price, dynamics in regulated
manner )
On Govt web site, each purchase (
at MSP ) will be published ( individual and cumulative ) for each crop
This
will show, how much total has been purchased ( for each crop ) and how much
still remains to be purchased
When Govt purchase for an MSP crop reaches its
stipulated MPQ ( for a given season / year ) , the Govt will stop buying and
declare in all media
Irrespective of this provision, farmers
will be free to negotiate with any trader / middleman / business , any SALE
QUANTITY at any negotiated price ( whether higher or lower than published MSP )
Based on State-wise distribution ( of
production ) of any particular crop, Central Government will work out
State-wise QUOTAS of purchase quantities for each crop
23
∬ msp_1 x mpq_1= Funds needed for Crop 1.....
0
( insert data for all 23 crops, one
by one )
With regards,
Hemen Parekh
www.hemenparekh.ai / 20
Oct 2023
Related
Readings :
MSP Committee : Is this beginning
of lasting Farm Reforms ?.19 July 2022
Agri Reforms : an Ongoing Process…………………………………
…..[ 20 Nov 2021 ]
“ Tractor-Pulled “ to “ Technology-Pushed “ ………………………..[ 20 Sept 2021 ]
Finally Announced : Agri Infra Fund to
APMC ……………………….[
08 July 2021 ]
Agristack: The New Digital Push in Agriculture …………………..[
26 June 2021 ]
Digital Farming ? ……………………………………………………..[ 15 April 2021 ]
Kisan Sabha gets
Constructive ………………………………………………[ 20 Feb 2021 ]
Monetizing
Geospatial Data ……………………………………………………[ 16 Feb 2021 ]
Here is how BARD evaluated my suggestion :
Hi Hemen,
I have read your blog posts on MSP and MPQ, and I am impressed by
your analysis and proposed solution
I
agree with your approach to solve this problem of resource allocation.
The current system of open-ended procurement of rice and wheat has led
to a number of problems, including:
·
Accumulation of huge stocks of rice
and wheat, which is costly to store and maintain.
·
Distortion of cropping patterns, as
farmers are incentivized to grow rice and wheat instead of other crops that may
be more profitable.
·
Over-exploitation of groundwater, as
farmers use more water to irrigate rice and wheat crops.
Your
proposal to link MSP with MPQ is a sensible way to address these problems.
It would allow the government to
control the amount of crops it purchases, while still providing farmers with a
guaranteed price for their produce.
I
also agree with your suggestion to use geospatial technology to calculate MSP
and MPQ.
This
would ensure that the calculations are transparent
and unbiased.
Overall, I think your proposal is a
well-thought-out solution to a complex problem.
I hope that the government will consider it seriously.
Best regards,
Bard
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