2019 – Posted in: Daily News – Tags: farmers, Minimum support price, NITI aayog

MINIMUM SUPPORT PRICE

For: Preliminary & Mains
Topic covers: MSP – new policy, rules and regulations, advantages to farmers

News Flash

NITI Aayog has been working on an action plan to relieve rural distress and energise the agricultural sector

Background

In the recent past, food inflation based on the Wholesale Price Index has risen faster than the food inflation based on Consumer Price Index.

This means that the price rise of farmers selling their produce is much slower than what consumers pay for it.

The key recommendations include:

Establishing alternative mechanisms to ensure that farmers get the promised minimum support price (MSP) for their produce,
Providing relief to the draught-affected and giving them proper advice for sowing in the coming kharif season.
One of the promises of the NDA government in its first term was that it would double the income of farmers. While this has not happened so far, ensuring of MSP is critical to this goal.
NITI Aayog has devised alternative ways for the government’s procurement of agri produce based on a new formula to provide MSP to farmers.
Improvement in farm produce realisations as promised under the MSP will help resolve farm distress and reduce the disparity between the inflation rates of wholesale and consumer price indices.

Other initiatives

Measures have also been suggested to address the issue of the huge stocks of sugar, cereals and pulses that have already been procured by the government agencies and are clogging storage infrastructure. Agricultural produce cannot be stored for long and have to be used before it loses its value.

The recommendations include measures that are in line with the Pradhan Mantri Kisan Samman Nidhi scheme under which cash incentives were given to farmers in the interim budget. The steps suggested to compensate draught-hit farmers in the agenda note are in accordance with the PM Kisan scheme as well.

The policy note proposes advising farmers on the right kind of sowing strategy to guard against monsoon vagaries, strengthening of irrigation schemes and providing other knowledge inputs.

To beef up the marketing infrastructure of farm goods, Aayog has pushed for the nationwide adoption of eNAM (National Agriculture Market).

Way ahead

The government’s long-term agenda for the agricultural sector includes reforms which can transform the sector. In the last two-and-a-half decades, agriculture has not witnessed any meaningful reforms. Niti Aayog’s proposed measures also discuss possibilities such as corporate farming.

NITI Aayog

The National Institution for Transforming India, also called NITI Aayog, was formed via a resolution of the Union Cabinet on January 1, 2015.
NITI Aayog is the premier policy ‘Think Tank’ of the Government of India, providing both directional and policy inputs. While designing strategic and long term policies and programmes for the Government of India, NITI Aayog also provides relevant technical advice to the Centre and States.
The Government of India, in keeping with its reform agenda, constituted the NITI Aayog to replace the Planning Commission instituted in 1950.
NITI Aayog acts as the quintessential platform of the Government of India to bring States to act together in national interest, and thereby fosters Cooperative Federalism.
At the core of NITI Aayog’s creation are two hubs – Team India Hub and the Knowledge and Innovation Hub. The Team India Hub leads the engagement of states with the Central government, while the Knowledge and Innovation Hub builds NITI’s think-tank capabilities. These hubs reflect the two key tasks of the Aayog.
NITI Aayog is also developing itself as a State of the Art Resource Centre, with the necessary resources, knowledge and skills, that will enable it to act with speed, promote research and innovation, provide strategic policy vision for the government, and deal with contingent issues.

Source: Business Standard

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