{"id":83358,"date":"2021-02-18T11:27:13","date_gmt":"2021-02-18T05:57:13","guid":{"rendered":"https:\/\/blog.forumias.com\/?p=83358"},"modified":"2021-02-18T12:10:36","modified_gmt":"2021-02-18T06:40:36","slug":"issue-of-msp-calculation-and-farmers-demand","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/issue-of-msp-calculation-and-farmers-demand\/","title":{"rendered":"Issue of MSP Calculation and farmer&#8217;s demand"},"content":{"rendered":"<p><b>Synopsis:\u00a0 As per the government, <\/b><span style=\"font-weight: 400;\">M S Swaminathan report\u2019s recommendations on MSP are already implemented. However, protesting farmers and farm experts contest the claim.<\/span><\/p>\n<p><b>Introduction\u00a0<\/b><\/p>\n<p><span style=\"font-weight: 400;\">Protesting farmers and farm experts have contested the government&#8217;s claim. They say that the government is going by its own formula and farmers&#8217; income not improved yet.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">The farmers are claiming so because the actual amount depends on the method used to calculate the cost of production. <\/span><\/li>\n<\/ul>\n<p><strong>What are the various formulas used to calculate the cost of production in agriculture?<\/strong><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">There are at least six formulas to make that calculation which include A1, A2, B1, B2, C1 and C2.<\/span><\/li>\n<\/ul>\n<table style=\"border-collapse: collapse; width: 100%; height: 392px;\">\n<tbody>\n<tr style=\"height: 56px;\">\n<td style=\"width: 47.6667%; height: 56px;\"><strong>Formulas used to determine the cost of production<\/strong><\/td>\n<td style=\"width: 52.3333%; height: 56px;\"><strong>Criteria included<\/strong><\/td>\n<\/tr>\n<tr style=\"height: 168px;\">\n<td style=\"width: 47.6667%; height: 168px;\"><span style=\"font-weight: 400;\">A1 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 168px;\"><span style=\"font-weight: 400;\"><strong>all actual expenses in cash. <\/strong>Included the value of hiring human resource, the value of owned machine labour, hired machinery charges, the value of seeds both farm produced and purchased, the value of pesticides etc.\u00a0\u00a0<\/span><\/td>\n<\/tr>\n<tr style=\"height: 56px;\">\n<td style=\"width: 47.6667%; height: 56px;\"><span style=\"font-weight: 400;\">A2 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 56px;\"><span style=\"font-weight: 400;\"><strong>A1 plus rent paid for leased-in-land<\/strong><\/span><\/td>\n<\/tr>\n<tr style=\"height: 28px;\">\n<td style=\"width: 47.6667%; height: 28px;\"><span style=\"font-weight: 400;\">B1 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 28px;\"><span style=\"font-weight: 400;\"><strong>A1 and interest on the value of an owned capital asset<\/strong><\/span><\/td>\n<\/tr>\n<tr style=\"height: 28px;\">\n<td style=\"width: 47.6667%; height: 28px;\"><span style=\"font-weight: 400;\">B2 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 28px;\"><span style=\"font-weight: 400;\"><strong>B1 plus the rental value<\/strong> of owned land and<strong> rent paid for leased<\/strong>-in-land.\u00a0<\/span><\/td>\n<\/tr>\n<tr style=\"height: 28px;\">\n<td style=\"width: 47.6667%; height: 28px;\"><span style=\"font-weight: 400;\">C1 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 28px;\"><span style=\"font-weight: 400;\"> <strong>B1 <\/strong>and the credited value of family labour<\/span><\/td>\n<\/tr>\n<tr style=\"height: 28px;\">\n<td style=\"width: 47.6667%; height: 28px;\"><span style=\"font-weight: 400;\">C2 method <\/span><\/td>\n<td style=\"width: 52.3333%; height: 28px;\"><span style=\"font-weight: 400;\"><strong>B2 <\/strong>and the credited with the value of Family Labour<\/span><\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\"><strong>M S Swaminathan report<\/strong> had <strong>recommended<\/strong> that the MSP should be calculated by including all actual farm costs as <strong>C2 along with an additional 50% margin<\/strong>.<\/span><\/li>\n<\/ul>\n<p><b>What formula does the government use, to calculate MSP?<\/b><\/p>\n<p><b>Different formulas were recommended by different committees<\/b><span style=\"font-weight: 400;\"> formed for calculating MSP. For example, Dr M S Swaminathan Committee recommended C2+50%, Ramesh Chand Committee (RCC) recommended MSP on C2+10% formula.<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><b>First, the government used <\/b>its own formula<b> A2+ Family Labour<\/b><span style=\"font-weight: 400;\"> as a cost of production. The government then pay farmers 1.5 times the amount of A2+FL. But, the increase in the revenue of farmers did not make any difference in reality.<\/span><\/li>\n<li style=\"font-weight: 400;\"><b>Second, <\/b><span style=\"font-weight: 400;\">a comparison with the government method and Swaminathan report shows that there is a <strong>huge<\/strong> <\/span><b>difference between A2+FL<\/b> (Government)<b> and C2 <\/b>(Swaminathan committee) <span style=\"font-weight: 400;\">for the main crops. The value of A2+FL is much lower than the C2.\u00a0<\/span><\/li>\n<li><span style=\"font-weight: 400;\">Even if the costs suggested by RCC are taken into consideration can also <\/span><b>improve the welfare of farmers.\u00a0<\/b>But the government is calculating MSP based on their own formula.<\/li>\n<\/ul>\n<p><b>The way forward<\/b><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Swaminathan report\u2019s MSP formula, C2 plus 50% is better for providing farmers with a higher value for their produce.<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Thus, the government should fix MSP by calculating C2, along with an addition of 50% margin. The MSP for wheat would be Rs 2,787 and paddy Rs 3,116 per quintal.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">If the RCC formula (C2 +10%) is adopted, then the MSP should be fixed at Rs 2,044 (wheat) and Rs 2,285 (paddy), respectively.<\/span><\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Synopsis:\u00a0 As per the government, M S Swaminathan report\u2019s recommendations on MSP are already implemented. However, protesting farmers and farm experts contest the claim. Introduction\u00a0 Protesting farmers and farm experts have contested the government&#8217;s claim. They say that the government is going by its own formula and farmers&#8217; income not improved yet. The farmers are&hellip; <a class=\"more-link\" href=\"https:\/\/forumias.com\/blog\/issue-of-msp-calculation-and-farmers-demand\/\">Continue reading <span class=\"screen-reader-text\">Issue of MSP Calculation and farmer&#8217;s demand<\/span><\/a><\/p>\n","protected":false},"author":10315,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230,9],"tags":[1285],"class_list":["post-83358","post","type-post","status-publish","format-standard","hentry","category-9-pm-daily-articles","category-public","tag-agri_0","entry"],"jetpack_featured_media_url":"","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/83358","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10315"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=83358"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/83358\/revisions"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=83358"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=83358"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=83358"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}