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India: Politics in Minimum Support Price (MSP)?

Cotton sowing has commenced in North India since mid April and will continue till mid June. Ideally, the MSP for various agriculture products including cotton must be announced before the sowing begins. Timely declaration of MSP helps farmers decide about future sowing but the government system has once again failed in the duty. This dilutes the very purpose of determination of the MSP.

In India, Commission for Agricultural Costs and Prices Commission (CACP) has been set up to propose support price for agriculture products. It studies the expenses of production, expenses of agriculture commodities calculates the returns due to the farmers and handover its recommendation for MSP to the Indian Government. It is the duty of the Central Government to declare these MSPs after due consideration before the beginning of the new sowing season. But no time limit has been set for the decision on declarations of MSP. This leads to frequent instances of delay in declaration of MSP for cotton even after the sowing has started.

Current recommendations: As per current news reports, the Agriculture Commission has submitted its recommendations for MSP of the current year to the Indian Government in Mid April. It has suggested an increase of Rs.100 per quintal in the prices of seed cotton. But this recommendation will not be considered official increased till the Indian Government gives its final decision. The Government reserves the right to amends or reject the Agriculture Commission's recommendation. Most of the owing operation in many cotton centers will be completed by the time the official declaration will be made. Also there is no transparency in the procedure followed by the Agriculture Commission to recommend and government to take final decision about the MSP.

Cotton Advisory Board (CAB): The CAB has failed to address the above issue of delay in declaration of MSP in its last meeting held on 17th April 2013. Even the state governments have miserably failed to make an effective representation in this matter. Let us hope things change for the better in India, an predominately agro economy country.

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