Support Price Calculation may Include Value of Family Labour
New Delhi: The government is likely to consider actual expenditure by farmers plus the value of family labour to calculate input costs of cultivation and fix support prices that will give 1.5 times the cost thus calculated, officials said. It is not likely to use the other method of considering comprehensive cost, which is much higher because it also includes the imputed rental value of the land owned by the farmer, they said.
In his Budget speech, finance minister Arun Jaitley said MSP for kharif crop would be at least at one and half times of their production cost, but he did not give more details. He is expected to communicate to the Commission for Agricultural Costs & Process (CACP) the desired mechanism to calculate the MSP. Niti Aayog member Ramesh Chand said the actual expenditure on various inputs, called A2 in official parlance, along with family labour (FL) should be used, not the more comprehensive cost, which is called C2. “In my view the government will take A2 plus +FL, to give margin of 50% for consideration of MSP. The rationale for this is that rental value of own land which is included in C2 is not incurred by 88% of the farmers,” Chand said.
Another government official said the likely calculation method would be a big boost for low-margin crops, while other crops were already getting good returns. “The MSP shows that for wheat, mustard and chana, farmers has got returns of over 50% when A2+FL costs are used. In wheat it has been 112%,” he said. The A2+FL measure includes paid out costs- like seed, fertilizer, irrigation, pesticide, machine labour, human labour , bullock labour and interest on working capital plus an imputed value of family labour.