Farmers from NE fare worst in getting MSPs, says report
LEFT BEHIND Govt panel says absence of procurement by FCI leads to region’s farmers resorting to ‘distress selling’
NEW DELHI: Farmers in the northeast, a rainfall-surplus region of paddy and horticulture, hardly receive federally fixed minimum support prices (MSPs) for crops, resulting in “distress selling” of their produce the statutory Commission for Agricultural Costs and Prices (CACP) has said in its latest price-policy report.
The CACP, the panel that recommends MSPs, said although farmers in states such as Assam have immense potential for paddy production, only a small percentage of this could be utilised so far. The main reason for farmers not getting profitable prices is the absence of procurement by the Food Corporation of India (FCI) in major rice-growing northeastern states, such as Assam, the report states.
MSPs are effectively implemented only in states such as Punjab, Haryana and Madhya Pradesh for wheat, apart from Andhra Pradesh, Chhattisgarh, Punjab and Haryana for rice. The 70th round of the National Sample Survey for 2012-13 showed only 13.5% of paddy farmers and 16.2% of wheat farmers were able to sell their produce to government agencies at MSP.
MSPs are prices at which the government buys crops. They are meant to act as a floor price for private traders to help avoid distress sales, or selling of farm produce at grossly undercut prices due to lack of market options.
Rejection of paddy due to higher moisture by the FCI is causing northeastern farmers to “resort to distress selling”, the report notes. “If the local procurement infrastructure is strengthened in N-E states, farmers will get better price and cost of transportation will also be saved. This will incentivise farmers for increasing the productivity and production,” the report adds.
The Union government on July 4 hiked MSPs for kharif (summer) crops to at least 1.5 times the production cost. Paddy MSP increased 12.9%.
Interestingly, the findings on poor farmer-end prices in the northeast by CACP are contained in the same report that recommended new hiked MSPs for kharif or summer-sown season to boost farmer incomes.
The CACP has recommended that the FCI, the main grain-procuring agency, tweak its procurement standards to take into account disadvantages faced by northeastern farmers.
The moisture content in paddy grown in the region is about 17%, way higher than the FCI’s norms. The CACP has suggested that the permissible moisture for paddy from northeast should be increased from 14% to 16%.