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CACP Decides MSP without the Mandated Farmer Representatives

The Commission for Agricultural Costs and Prices (CACP), that is supposed to be a five-member body, sadly consists just two at present.

Image Courtesy: Deccan Chronicle

The minimum support price (MSP) for agricultural produce is decided by the Commission for Agricultural Costs and Prices (CACP), a body under the Ministry Agriculture and Farmer Welfare. This body had a meeting on February 16 this year to formulate the Price Policy Report for the Kharif crops in 2018-19 season. This meeting is of significance as the farmers' organisations have been agitating for the implementation of the Swaminathan Committee Reports recommendations that says the support price should be total costs plus 50 percent. The Union government during first Budget Session 2018 has claimed that it was already giving MSP 50 percent above the cost of production.

The All India Kisan Sabha (AIKS) one of the largest farmers’ association in the country has refuted these claims in a memorandum submitted to the CACP. It has stated that the government has shifted the “goal post” by calculating the A2 (costs of inputs) + FL (Family Labour). But the farmers have been agitating saying that the MSP given currently given is not sufficient to even support the family living expenses. The farmers have time and again demanded Remunerative Support Price which takes into account the cost of inputs plus rental value (of owned and leased land) plus family labour and the interest on the value of fixed assets.

AIKS through the memorandum asked the Commission “Why it has not recommended a single rupee hike for most Rabi crops of 2018-19 marketing year over 2017-18 prices although farmers’ organisations have been demanding higher prices?” In the table given below AIKS has shown that the government had promised MSP – C2 +50 % but has gone back to fixing the MSP at A2 + FL. AIKS has argued that the C2 calculations are itself disputed by farmers organisations and that the CACP does not even take the state governments weighted average cost of production calculations.


AIKS has demanded that “C3 costs which include 10% over C2 as managerial cost and MSP at least 50 percent above it must be considered” if the farmers have to be pulled out from the crisis that they are trapped in. It has also said that the opinions of the farmers’ organisations and the state governments should be taken while formulation the cost of calculation.

The memorandum has stated that in the absence of any procurement policy the MSP is of no use to the farmers. The NSSO study also supports this claim only 10 percent of Farmers get the MSP and 90 percent are at the mercy of the traders purchase way below the designated price.

The stories of the farmers are not getting the remunerative prices has also partly do with the Commission’s functioning itself. The Commission for Agricultural Costs and Prices (CACP)is supposed to be a five-member body comprising of the chairperson, member secretary and three members – one official and two non-official. The two non-official members are to be from the farming community who are active in farmer associations.

The Commission sadly has only two members currently – Prof. Vijay Paul Sharma as the Chairperson and Dr Shailaja Sharma as the Member Secretary. The official member position and the two posts representing the farmers are vacant. When the voices of the farmers are not expressed in the commission how can we expect others to play by the book?


Even the previous Price Policy Report had no farmers’ representatives on the commission.


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