Indian Express Explained

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1)Explained: Why it’s an underestimate to say only 6% farmers benefit from MSP :-

What is the source of this Data and why is it not up to the mark :- The apparent source of the 6% figure is the Shanta Kumar-headed High Level Committee on Restructuring of Food Corporation of India (FCI).

Its report, submitted in January 2015, had noted that only 5.21 million of the country’s total estimated 90.20 million agricultural households in 2012-13 had sold paddy and wheat to any government procurement agency. In other words, less than 5.8%. The committee, in turn, based its analysis on the National Sample Survey Office’s (NSSO) ‘Key Indicators of Situation of Agricultural Households in India’ report for the 2012-13 farm year (July-June).

The Shanta Kumar panel, however, looked only at paddy (un-milled rice) and wheat. While much of public procurement is, no doubt, limited to these two cereals — the 76.49 million tonnes (mt) of paddy and 38.99 mt of wheat bought by FCI and state agencies in 2019-20 was worth almost Rs 215,000 crore at their respective MSPs — one must also take into account other crops.

Milk apart, sugarcane is another crop not procured by government agencies per se. Cane prices are, nevertheless, fixed by the government, with sugar mills legally obliged to pay the Centre’s fair and remunerative price (FRP) within 14 days of purchase. They buy roughly 80% of the total crop produced. 

All in all, it can be reasonably inferred that the existing MSP/assured price system covers 25 million-plus farmers across all crops, including pulses and oilseeds. Depending on the denominator – the 2015-16 Agriculture Census puts the total number of operational holdings at 146.45 million – that translates into anywhere between 15% and 25%. Certainly, not 6%.

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