Working group finds MSP calculation flawed, unscientific

CHANDIGARH - A high-powered working group on agriculture production has said the methodology of the Commission for Agricultural Costs and Prices (CACP) to calculate cost of cultivation is “highly flawed and unscientific” and that the minimum support price (MSP) should be 50 percent higher.

The group, headed by Haryana Chief Minister Bupinder Singh Hooda, wants the minimum support price (MSP) for wheat, paddy and other crops to be decided on the basis of the increased cost of cultivation.

“The methodology adopted by the Commission for Agricultural Costs and Prices (CACP) for calculating cost of cultivation is highly flawed and unscientific. It needs to be revisited to make it realistic either on the lines of Bureau of Industrial Costs and Prices (BICP) formula used for estimating industrial costs, or, in the alternative, the MSP should be 50 percent higher than the cost of cultivation,” Hooda said at a meeting of the group here Monday.

The working group comprises the chief ministers of Punjab and Haryana, the two states that contribute over 80 per cent to the country’s total foodgrain (wheat and paddy) production. Senior functionaries from the centre and states like West Bengal and Bihar are its members.

The report of the committee will be finalised within a week and submitted to the prime minister next month.

Hooda suggested that the country needed to launch a technology mission on farm mechanisation to cross the productivity barriers.

“The agricultural technologies being used by smaller land-holding countries like Japan and Korea should be utilized. At present, we are using the technology prevalent in bigger land holding countries like Canada. Even states like Punjab and Haryana are under-mechanised and the country needs to launch a technology mission on farm mechanisation to cross the productivity-barriers,” he said.

Stressing the need for introducing better technology to enhance agricultural production and make pricing of crops reasonable to benefit the farmers, Hooda said the country would need 294 million tonnes of foodgrain before 2020.

“For this, a consistent 2.5 percent annual growth rate in food production will be needed, which is a very challenging target to achieve against a finite, depleting and often degrading natural resources base. The yields of rice, wheat and other cereal crops would have to be increased by 22 to 41 percent and of pulses by over 110 percent of the current yields. Productivity levels have to be enhanced.”

Prime Minister Manmohan Singh has urged scientists and farmers to work for a second green revolution in the country. The first green revolution (1950-70s) had made India self-sufficient in foodgrain.

The working group has noted that India has become the second largest producer of rice and wheat, the third largest producer of cotton and groundnut, fourth largest producer of sugarcane and potatoes and second largest producer of both fruits and vegetables.

“India is also now the largest producer of milk and has been maintaining 30-50 million tonnes of foodgrain in its reserve stocks. However, the production levels over the last decade have reached a plateau and the decreasing total factor productivity is one of our serious concerns,” it said.

The group is likely to suggest that the central and state government work together to liberalise the scope of the debt swap scheme to protect farmers from the clutches of money-lenders and make it more acceptable to the stakeholders.

Punjab Chief Minister Parkash Singh Badal suggested that given the fixed availability of cultivable land and other infrastructure, the production of foodgrain be raised to ease the pressure on food prices.

Bihar Agriculture Minister Renu Kumari Khushwaha said farmers were facing shortage of labourers due to the implementation of Mahatma Gandhi National Rural Employment Guarantee Scheme (NREGS).

“The scheme’s ambit should be enlarged to include the work in the fields of the farmers to fill up the gap,” she suggested.