MSP helps Pb, Hry lead in avg gross returns for paddy, wheat in country

As experts and govt officials have questioned the need for the minimum support price (MSP), data compiled by the Commission for Agricultural Costs and Prices (CACP) suggests higher average gross returns for the crops in the states where farmers get the support price for their produce from the govt agencies. Farmer groups of Punjab and Haryana have started an intense protest to seek a legal guarantee of MSP for their crops.
While recommending MSPs of mandated kharif crops, CACP considers the cost of production and other important factors such as demand-supply situation and price trends in domestic and global market, inter-crop price parity, terms of trade between agriculture and non-agriculture sectors, likely impact of MSP on consumers, producers and overall economy along with rational utilisation of land, water and other production resources, and a minimum of 50% as the margin over cost of production.
As per calculations of CACP, the average gross returns of wheat over CoC A2 A2+FL (paid-out cost plus imputed value of family labour) during the triennium ending (TE) 2021-22 were highest for Haryana at Rs 69,372 per hectare followed by Punjab at Rs 64,510 per hectare. In its ‘Price Policy for Rabi Crops: Marketing Season 2024-25’, CACP has observed that gross returns over costs for wheat were the highest for Haryana due to lower cost of production while these were the lowest for West Bengal mainly due to lower prices
In its ‘Price Policy for Kharif Crops: Marketing Season 2023-24’, CACP has stated that for cultivation of paddy, gross returns over A2+FL cost per hectare was the highest for Punjab at Rs 82,037 followed by Haryana at Rs 78,980. The commission has stated in the kharif price policy, “Due to assured MSP, low production risks and high profitability, paddy production has increased significantly in the country, while production of nutri-cereals, soybean, sunflower, sesamum and nigerseed have remained almost stagnant due to lower yields.”

Cost Estimates
The commission used crop-wise, state-wise cost estimates provided by the economics & statistics division, Union ministry of agriculture and farmers welfare, compiled under ‘Comprehensive Scheme (CS) for studying the Cost of Cultivation of Principal Crops in India’.

CACP has stated that since CS data is available up to 2021-22, it was used for cultivation costs and gross returns projections. Based on CS data, crop-wise and state-wise projections of CoC were made for the kharif marketing season 2023-24 and 2024-25 rabi marketing season.

This article has been republished from the Times of India.