PM Narendra Modi iterates cost+50% plan, says many spreading rumours about MSP
The Indian Express, By: ENS Economic Bureau | New Delhi | March 18, 2018
Prime Minister Narendra Modi on Saturday reiterated the recent Budget announcement that minimum support prices (MSPs) for all notified crops would be at least 1.5 times their ‘cost’. Addressing the Krishi Unnati Mela 2018 at Pusa agri complex in the national capital, he said the Centre was actively engaging with the states to ensure that farmers take full benefit of MSPs.
However, as he spelt out how the cost of crops would be computed for determining the MSPs, Modi did not include paid-out land costs, but added ‘interest on working capital’. The government’s plan, it seems, is to use a cost slightly higher than the so-called A2+FL, but not as high as C2, which includes more elements. However, the use of the A2+FL plus ‘interest on working capital’ formula might not stoke food inflation much, analysts said.
The PM said many people were spreading rumours regarding MSPs and creating a ‘gloomy atmosphere’. Several farmers’ organisations have called for calculating cost of crops with the C2 formula. Farmer leader V M Singh noted that in case of many crops, the MSPs were 1.5 times A2+FL cost even in 2013. The PM said the cost of crops will include elements such as labour, rent for machinery, cost of seeds and fertilisers, land revenue being given to state government, interest on working capital and rent of leased land. Also, the imputed cost of family labour would be taken into account.
Finance Minister Arun Jaitley had said that the government will consider A2+FL, which includes paid out costs on inputs and imputed value of family labour. However, PTI reported that when contacted after the Prime Minister’s speech, Niti Aayog member Ramesh Chand said what he meant was A2+FL. “What the PM talked about was A2+FL. He shared the components of the cost. It is a comprehensive subject and not many people know about it. The PM tried to explain in detail,” he said.
Modi said ‘comprehensive steps’ were being taken for agriculture marketing reforms. “It is important to connect rural retail markets with wholesale and global markets,” he added. He said in the recent Budget, Grameen Retail Agriculture Markets (GRAMs) have been envisaged and 22,000 rural haats will be upgraded with necessary infrastructure, and integrated with APMC and e-NAM platforms. Modi said Farmer Producer Organisations would be given relief on income tax, on the lines of cooperative societies. He said a new chapter in agriculture marketing reform was being added, with the e-marketing portal for organic products.
Modi appealed to farmers to cut use of urea by 50 per cent in the next five years. He said the government cannot do this nor does it want to do it, but farmers can certainly make it possible. “Government is working day and night to ensure that farmers get latest seeds, required electricity, do not face any problem in market access and get right prices for their produce,” Modi said.
He inaugurated the Jaivik Kheti (organic farming) portal and laid the foundation stone of 25 KVKs (krishi vigyan kendras). He also conferred the Krishi Karman Award and Pandit Deen Dayal Upadhaya Krishi Vigyan Protsahan Puruskar.
(With FE inputs)
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