(GIST OF YOJANA) Market and Remunerative Price to All  [MARCH-2018]

(GIST OF YOJANA) Market and Remunerative Price to All


Market and Remunerative Price to All

Inclusive MSP

Minimum Support Price under price support mechanism, so far, has been limited to select crops and select geographies of the country. Another criticism of MSP has been that it often does not provide adequate incentive over cost of production. In a first of its kind announcement, the Government has directed NITI Aayog to suggest alternate mechanisms for ensuring receipt of MSP equivalent returns to the farmer, Often the farmer is forced to sell at market prices below MSP with no option of realising a higher income. The Government has stepped forward to formulate initiatives to purchase produce at MSP or through some other mechanism to ensure that at least the amount declared as MSP reaches the farmer. The announcement is a welcome move given the think tank’s recent appraisal of MP’s Bhaavantar Yojana (Price Deficiency Payments) as one such alternate mechanism. That the MSP itself is now mandated to be pegged ‘in-principle’ at 50 percent higher than the production cost of the farmer is another step towards ensuring income inclusiveness.

One of the reasons for the vast gap between farm harvest price and MSP is limitations to market access. Nearly 85 percent of the total cultivators belong to small and marginal category; their access to markets is limited owing to low scale of production. The absence of linkage between the farmer and the wholesale markets has been long impeding the formation of an accessible, decentralised market structure. The Government has set aside Rs. 2000 crores for upgrading 22000 rural periodic markets into Grameen Agricultural Markets (GrAMS) to serve as multipurpose platforms for assembly, aggregation and local retail. GrAMs will provide systemic linkage access points to realise the vision of a unified national market by bringing primary post production activities to farmers at village level.

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Courtesy: Yojana