The government has purchased more than 4 million tonnes of rice from nearly 350,000 farmers, who have been paid a minimum support price (MSP) of Rs 8,032 crore through October 11 since crop purchases began on October 24. of September. The amount acquired so far is 33% higher than the corresponding period last year, according to data cited by the Ministry of Agriculture.
While the acquisition of the kharif staple food continues steadily, farmers in Punjab and Haryana nevertheless continue to protest against a set of laws enacted by Parliament to deregulate agricultural markets, which they fear will weaken the MSP system, whereby agricultural products are purchased by the government at assured prices.
The Center would also buy legumes, oilseeds and copra at MSP prices beyond the amount approved so far from any state where the market rate falls below MSP under its price support scheme, the Ministry of Agriculture said in a statement. .
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Despite this, several summer-sown crops, such as soybeans and corn, are selling below the minimum set by the government because the government purchases so few non-cereal grains.
The government “continues to purchase 2020-21 kharif crops in its MSP from farmers under its existing MSP schemes” and the acquisitions “are proceeding smoothly,” a statement from the Ministry of Agriculture said, pointing to the higher acquisition trend.
As of October 11, the government through its food agencies has purchased an additional 606.56 tonnes of two legumes, moong and urad, with an MSP value of 4.36 million rupees.
The government also approved requests from 10 states to purchase 3.70 million tons of pulses and oilseeds. These states are Tamil Nadu, Karnataka, Maharashtra, Telangana, Gujarat, Haryana, Uttar Pradesh, Odisha, Rajasthan, and Andhra Pradesh.
The government has also sanctioned the acquisition of 100,000 tonnes of copra, a perennial crop, from Andhra Pradesh, Karnataka, Tamil Nadu and Kerala.
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Crops, such as soybeans, ragi, corn and cotton, sell up to 30% below MSP, according to data from Agmarknet, the portal of the Ministry of Agriculture that tracks prices in mandis or wholesale markets .
Low crop yields have been a persistent problem for farmers, especially during bouts of glut, like now. MSPs, which are set at 50% over cost for nearly two dozen crops, do not necessarily lead to higher farm incomes, as government purchases at MSP rates are largely limited to wheat and rice. For most other crops, farmers are mostly price takers, which means they are forced to accept what the markets dictate.
“Pushing the private sector toward triggering a market compensation price closer to or equal to the MSP will depend on the scope of government acquisitions,” said economist Abhijit Sen.
In the case of commodities such as pulses and oilseeds, public procurement is insufficient to improve market rates. For example, the nearly 3.70 million tons of legumes and oilseeds that the government approved for purchase at MSP is less than 15% of total production, too small an amount to make a difference in prices offered by private entities.
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