{"id":43000,"date":"2024-10-17T03:28:48","date_gmt":"2024-10-16T21:58:48","guid":{"rendered":"https:\/\/vajiramandravi.com\/current-affairs\/?p=43000"},"modified":"2025-05-05T22:14:50","modified_gmt":"2025-05-05T16:44:50","slug":"union-government-announces-msp-hike-for-rabi-crops","status":"publish","type":"post","link":"https:\/\/vajiramandravi.com\/current-affairs\/union-government-announces-msp-hike-for-rabi-crops\/","title":{"rendered":"Union Government Announces MSP Hike for Rabi Crops"},"content":{"rendered":"<h2><strong>What\u2019s in today\u2019s article?<\/strong><\/h2>\n<ul>\n<li>Why in News?<\/li>\n<li>MSP Regime in India<\/li>\n<li>Issues Faced by the MSP Regime in India<\/li>\n<li>News Summary Regarding MSP Hike for Rabi Crops<\/li>\n<\/ul>\n<h2><strong>Why in News?<\/strong><\/h2>\n<p>The Union government has declared minimum support prices (MSP) for six rabi crops for the 2025-26 marketing season, notably increasing the MSP for wheat by \u20b9150 per quintal to \u20b92,425, marking a 6.59% rise from the previous MSP.<\/p>\n<h2><strong>Minimum Support Price (MSP) Regime in India:<\/strong><\/h2>\n<ul>\n<li><strong>About MSP:<\/strong> MSP is a form of <strong>market intervention<\/strong> (a policy decision not enforceable by law) by the Government of India to insure agricultural producers against any sharp fall in farm prices during bumper production years.<\/li>\n<li><strong>Announced by:<\/strong> These are announced by the <strong>Cabinet Committee on Economic Affairs<\/strong> (Chaired by the PM of India) on the basis of the recommendations of the Commission for Agricultural Costs and Prices (<strong>CACP<\/strong>) at the beginning of the sowing season for certain crops.<\/li>\n<li><strong>Objectives:<\/strong>\n<ul>\n<li><strong>MSPs are a guarantee price<\/strong> for farmer\u2019s produce from the Government to prevent the farmers from distress sales and to procure food grains for public distribution.<\/li>\n<li><strong>For example, <\/strong>if the market price for a commodity falls below the specified minimum price due to market surplus, government agencies will buy the entire quantity supplied by farmers at the announced minimum price.<\/li>\n<li>The MSP hikes are <strong>essential not only for farmers&#8217; welfare but also for stabilising agricultural markets<\/strong>, especially as India aims to enhance domestic pulse production amid rising imports.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Background:<\/strong>\n<ul>\n<li>India&#8217;s agriculture was <strong>devastated under British rule<\/strong> and the farmers were impoverished.<\/li>\n<li><strong>The Food-Grain Enquiry Committee<\/strong>, established by the Jawaharlal Nehru administration in 1957, was the first attempt to address the agricultural earning issue.<\/li>\n<li>In 1964,<strong> Lal Bahadur Shastri<\/strong> formed the Food Grain Price Committee (under LK Jha), to push for a MSP regime.<\/li>\n<li><strong>The first MSP announcement<\/strong> was made in 1967 by the then Agriculture Minister Jagjivan Ram.<\/li>\n<li>Thus, the MSP regime came into existence as<strong> a policy decision<\/strong> (to be applicable uniformly across India) and the government set up the Agricultural Prices Commission (renamed as the CACP in 1985) for fixing MSP for crops.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Crops covered<\/strong>:\n<ul>\n<li>Government announces MSPs for <strong>22 <\/strong>mandated crops and fair and remunerative price (FRP) for <strong>sugarcane <\/strong>(total 23).<\/li>\n<li>The mandated crops are <strong>14 <\/strong>crops of the <strong>kharif <\/strong>season, <strong>6 rabi crops<\/strong> (Wheat, Barley, Gram, Masur [Lentil], Rapeseed &amp; Mustard, Safflower) and two other commercial crops.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2><strong>Issues Faced by the MSP Regime in India:<\/strong><\/h2>\n<ul>\n<li><strong>Limited coverage:<\/strong> MSP is only applicable to certain crops, primarily those included in the government procurement system. Many farmers grow crops not covered by MSP, leaving them vulnerable to price fluctuations.<\/li>\n<li><strong>Regional disparities:<\/strong> The implementation of MSP varies across states. Some regions benefit more due to better procurement infrastructure, while others face challenges in accessing MSP, leading to uneven support for farmers.<\/li>\n<li><strong>Discourage diversification:<\/strong> Farmers may become overly reliant on MSP, which can discourage diversification and lead to overproduction of specific crops, causing market imbalances.<\/li>\n<li><strong>Procurement challenges: <\/strong>While MSP aims to ensure fair pricing, actual procurement processes can be inefficient. Issues like delays in payments, inadequate storage facilities, and corruption can hinder farmers from benefiting fully.<\/li>\n<li><strong>Market distortions: <\/strong>MSP can distort market signals by encouraging farmers to produce crops primarily for government support rather than responding to market demand, potentially leading to surpluses and wastage.<\/li>\n<li><strong>Neglect of non-cereal crops: <\/strong>The MSP regime has historically focused on staple crops like wheat and rice, often neglecting pulses, oilseeds, and other essential crops. <strong>This can impact nutritional diversity and food security.<\/strong><\/li>\n<li><strong>Inflationary pressure:<\/strong> Increasing MSP without corresponding productivity improvements can contribute to inflation in food prices, affecting consumers and the overall economy.<\/li>\n<li><strong>Sustainability concerns:<\/strong> The emphasis on certain crops may lead to unsustainable farming practices, such as excessive water use and soil degradation, affecting long-term agricultural viability.<\/li>\n<li><strong>Under utilisation of available support:<\/strong> Many farmers are not fully aware of the MSP policies or how to access them, leading to under utilisation of available support.<\/li>\n<li><strong>Political interference:<\/strong> MSP decisions can be influenced by political considerations, leading to inconsistencies in pricing and procurement policies that do not necessarily align with economic realities.<\/li>\n<\/ul>\n<h2><strong>News Summary Regarding MSP Hike for Rabi Crops:<\/strong><\/h2>\n<ul>\n<li><strong>Details of MSP adjustments:<\/strong><\/li>\n<\/ul>\n<figure class=\"image image_resized\"><img decoding=\"async\" src=\"https:\/\/vajiram-prod.s3.ap-south-1.amazonaws.com\/MSP_Hike_for_6_Rabi_Crops_19a0e9d2e5.webp\" alt=\"MSP Hike for 6 Rabi Crops.webp\" \/><\/figure>\n<ul>\n<li><strong>Government\u2019s justification:<\/strong>\n<ul>\n<li>Despite upcoming elections in states like Maharashtra and Jharkhand, the government <strong>denied any political motives<\/strong> behind the timing of these announcements.<\/li>\n<li>According to the Union Agriculture Minister, these hikes will <strong>ensure fair prices to farmers and encourage crop diversification<\/strong>.<\/li>\n<li>The decision to increase the MSP for mandated Rabi Crops for the Marketing Season 2025-26 aligns with the <strong>Union Budget 2018-19<\/strong> announcement of fixing the MSP <strong>at a level of at least 1.5 times of the All-India weighted average cost of production<\/strong>.<\/li>\n<li>The anticipated margin over the All-India weighted average cost of production varies among crops, with <strong>wheat leading at 105%,<\/strong> followed by rapeseed &amp; mustard at 98%, lentil at 89%, gram and barley both at 60%, and safflower at 50%.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Significance of wheat crop:<\/strong>\n<ul>\n<li><strong>Wheat is India\u2019s 2nd-largest crop<\/strong>, with a production estimate of 113.92 million tonnes for 2023-24.<\/li>\n<li><strong>UP, MP, and Punjab<\/strong> are the leading wheat-producing states.<\/li>\n<li>In the current marketing season, the government has procured 26.6 million tonnes of wheat, benefiting approximately 22 lakh farmers.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<hr \/>\n<h3><strong>Q.1. What is the Commission for Agricultural Costs and Prices (CACP)?<\/strong><\/h3>\n<p>The CACP is an attached office under the Union Ministry of Agriculture &amp; Farmers Welfare, that recommends Minimum Support Prices (MSP) for select crops. It was established in 1965 as the Agricultural Prices Commission, and was given its present name in 1985.<\/p>\n<h3><strong>Q.2. What is the Indian government doing for crop diversification?<\/strong><\/h3>\n<p>The Indian government is implementing the Crop Diversification Programme (CDP) in the Original Green Revolution States viz; Haryana, Punjab &amp; Western UP since 2013-14 to divert the area of water intensive paddy crop to alternative crops like pulses, oilseeds, coarse cereals, nutri cereals, cotton etc.<\/p>\n<p><strong>Source: <\/strong><a href=\"https:\/\/timesofindia.indiatimes.com\/business\/india-business\/centre-approves-msp-for-6-rabi-crops-for-marketing-season-2025-26-wheat-now-rs-2425-per-quintal\/articleshowprint\/114281750.cms?val=3728\" target=\"_blank\" rel=\"nofollow noopener\">Centre approves MSP for 6 Rabi crops for marketing season 2025-26; wheat now Rs 2,425 per quintal<\/a> | <a href=\"https:\/\/www.thehindu.com\/business\/agri-business\/union-cabinet-approves-hike-in-msp-for-rabi-crops\/article68760313.ece\" target=\"_blank\" rel=\"nofollow noopener\">TH<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Union government has declared MSP for six rabi crops for the 2025-26 marketing season, notably increasing the MSP for wheat by 6.59% (from the previous MSP) to \u20b92,425 per quintal<\/p>\n","protected":false},"author":5,"featured_media":43001,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[18],"tags":[],"class_list":{"0":"post-43000","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-upsc-mains-current-affairs","8":"no-featured-image-padding"},"acf":[],"_links":{"self":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43000","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/users\/5"}],"replies":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/comments?post=43000"}],"version-history":[{"count":0,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/posts\/43000\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media\/43001"}],"wp:attachment":[{"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/media?parent=43000"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/categories?post=43000"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/vajiramandravi.com\/current-affairs\/wp-json\/wp\/v2\/tags?post=43000"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}