3.6 Waman Rao Case, 1981 

MINIMUM SUPPORT PRICE

1. Context

2. What is Minimum Support Price (MSP)?

• MSP is the minimum price a farmer must be paid for their food grains as guaranteed by the government. They are recommended by the Commission for Agricultural Costs and Prices (CACP) and approved by the Cabinet Committee on Economic Affairs.
• The CACP submits its recommendations to the government in the form of Price Policy Reports every year.
• After considering the report and views of the state governments and also keeping in view the overall demand and supply situation in the country, the central government takes the final decision.
• Food Corporation of India (FCI) is the nodal agency for procurement along with State agencies, at the beginning of the sowing season.

• 7 cereals (paddy, wheat, maize, bajra, jowar, ragi, and barley)
• 5 pulses (chana, tur/arhar, moong, urad, and Masur)
• 7 oilseeds (rapeseed-mustard, groundnut, soya bean, sunflower, sesamum, safflower, and nigerseed) and
• 4 commercial crops (sugarcane, cotton, copra, and raw jute).

3. How MSP is Cauclated?

• MSP, presently, is based on a formula of 1.5 times the production costs.
• The CACP projects three kinds of production costs for every crop, both at state and all-India average levels.
• A2 covers all paid-out costs directly incurred by the farmer — in cash and kind — on seeds, fertilizers, pesticides, hired labor, leased-in land, fuel, irrigation, etc.
• A2+FL includes A2 plus an imputed value of unpaid family labor.
• C2: Estimated land rent and the cost of interest on the money taken for farming are added to A2 and FL.
• Farm unions are demanding that a comprehensive cost calculation (C2) must also include capital assets and the rentals and interest forgone on owned land, as recommended by the National Commission for Farmers.

4. The issue with the calculation of MSP

• To calculate MSP, the government uses A2+FL cost. The criticism of A2+FL is that it doesn’t cover all costs and that a more representative measure, C2, needs to be used.
• For example, in the 2017-18 rabi season, CACP data shows that C2 for wheat was 54% higher than A2+FL.
• The Swaminathan Commission also stated that the MSP should be based on the comprehensive cost of production, which is the C2 method.

5. Key Points about the Farmer's Demand

• After the recent decision to repeal three contentious farm laws, protesting farmer unions are now pressing for their demand of the legalization of the Minimum Support Price (MSP).
• They want a legal guarantee for the MSP, which at present is just an indicative or a desired price.
• Legalising MSP would put the government under a legal obligation to buy every grain of the crops for which MSPs have been announced.
• At present, the PM has announced the formation of a committee to make MSP more transparent, as well as to change crop patterns and to promote zero-budget agriculture which would reduce the cost of production.
• The entire issue of enforcing MSP legally is a tricky, complicated, and multidimensional one, involving lots of factors.
• Core demand: MSP based on a C2+50% formula should be made a legal entitlement for all agricultural produce. This would mean a 34% increase in the latest MSP for paddy and a 13% increase for wheat. MSP should also be extended to fruit and vegetable farmers who have been excluded from benefits so far.

6. The rationale behind the demand for legislation of MSP

• Farmers receive less than MSP: In most crops grown across much of India, the prices received by farmers, especially during harvest time, are well below the officially-declared MSPs. And since MSPs have no statutory backing, they cannot demand these as a matter of right.
• Limited procurement by the Govt: Also, the actual procurement at MSP by the Govt. is confined to only about a third of wheat and rice crops (of which half is bought in Punjab and Haryana alone), and 10%-20% of select pulses and oilseeds. According to the Shanta Kumar Committee’s 2015 report, only 6% of the farm households sell wheat and rice to the government at the MSP rates.

7. Why has the committee been set up?

• It has been constituted by the Ministry of Agriculture and Farmers Welfare as a follow-up to an announcement by the Prime Minister when he declared the government’s intention to withdraw the three farm laws.
• The protesting farm unions had demanded a legal guarantee on MSP based on the Swaminathan Commission’s ‘C2+50% formula’ (C2 is a type of cost incurred by farmers;). This was in addition to their demand for repeal of the three farm laws.

8. Committee on MSP, Natural Farming and Crop Diversification

 On Minimum Support Price (MSP)

• To suggest measures to make MSP available to farmers by making the systems more effective and transparent, 
• Give more autonomy to Commission for Agricultural Costs and Prices (CACP).

On Natural Farming: To make suggestions for programs and schemes for value chain development, protocol validation, and research for future needs and support for area expansion under the Indian Natural Farming System.

On Crop diversification: ​

To provide suggestions related to crop diversification including 

• Mapping of existing cropping patterns of agro-ecological zones of producer and consumer states,
• Strategy for diversification policy to change the cropping pattern according to the changing needs of the country and 
•  A system to ensure remunerative prices for the sale of new crops.

9. Why have the protesting farm unions opposed this committee?

• Firstly, this committee includes members who supported the now-repeated farm laws.
• Secondly, the terms and references of the committee do not mention the legal guarantee to MSP. Instead, it mentions making MSP more effective and transparent.

10. Challenges associated with MSP

• Protest by Farmers: Farm unions have been protesting for more than six months on Delhi's outskirts, demanding legislation to guarantee MSP for all farmers for all crops and a repeal of three contentious farm reforms laws.
• MSP and Inflation: When announcing the MSP, inflation should be taken into account. But often the price is not increased up to the mark. For example, this time MSP for Maize has not even considered inflation then how it will benefit farmers! Also, frequent increases in the MSPs can lead to inflation too.
• High Input Costs: The input costs have been rising faster than sale prices, squeezing the meager income of the small farmers and driving them into debt.
• Lack of Mechanism: There is no mechanism that guarantees that every farmer can get at least the MSP as the floor price in the market. So proper mechanisms need to be fixed for all times to come.
• Restriction in Europe: Even after producing surplus grains, every year a huge portion of these grains gets rotten. This is due to the restrictions under WTO norms, that grain stocks with the FCI (being heavily subsidized due to MSP) cannot be exported.

For Prelims: Minimum Support Price (MSP), World Trade Organisation (WTO), Commission for Agricultural Costs and Prices (CACP), Cabinet Committee on Economic Affairs, Food Corporation of India (FCI). For Mains: 1. The Minimum Support Price (MSP) scheme protects farmers from price fluctuations and market imperfections. In light of the given statement, critically analyze the efficacy of the MSP. (250 Words)

 

Previous year Question 1. Consider the following statements: (UPSC CSE 2020) 1. In the case of all cereals, pulses, and oil seeds, the procurement at Minimum Support Price (MSP) is unlimited in any State/UT of India. 2. In the case of cereals and pulses, the MSP is fixed in any State/UT at a level to which the market price will never rise. Which of the statements given above is/are correct? A. 1 only B. 2 only C. Both 1 and 2 D. Neither 1 nor 2 Answer: D 2.Which of the following factors/policies were affecting the price of rice in India in the recent past? (UPSC CSE, 2020) (1) Minimum Support Price (2) Government’s trading (3) Government’s stockpiling (4) Consumer subsidies Select the correct answer using the code given below: (a) 1, 2 and 4 only (b) 1, 3 and 4 only (c) 2 and 3 only (d) 1, 2, 3 and 4 Answer (d) 3.In India, which of the following can be considered as public investment in agriculture? (UPSC GS1, 2020) (1) Fixing Minimum Support Price for agricultural produce of all crops (2) Computerization of Primary Agricultural Credit Societies (3) Social Capital development (4) Free electricity supply to farmers (5) Waiver of agricultural loans by the banking system (6) Setting up of cold storage facilities by the governments. In India, which of the following can be considered as public investment in agriculture? Select the correct answer using the code given below: (a) 1, 2 and 5 only (b) 1, 3, 4 and 5 only (c) 2, 3 and 6 only (d) 1, 2, 3, 4, 5 and 6 Answer (c) 4.The Fair and Remunerative Price (FRP) of sugarcane is approved by the (UPSC CSE, 2015) (a) Cabinet Committee on Economic Affairs (b) Commission for Agricultural Costs and Prices (c) Directorate of Marketing and Inspection, Ministry of Agriculture (d) Agricultural Produce Market Committee Answer (a)

 Source: The Indian Express

ADITYA L1

 

1. Context

Barely 10 days after creating history by landing near the South Pole of the Moon, the Indian Space Research Organisation (ISRO) is set to launch its spacecraft to study the Sun. Aditya-L1 will be launched on September 2 at 11:50 am from Sriharikota. 

Image Source: URSC

2. About Aditya L1

• Aditya L1 shall be the first space-based Indian mission to study the Sun. 
• The spacecraft shall be placed in a halo orbit around the Lagrangian point 1 (L1) of the Sun-Earth system at a distance of about 1.5 million km from the Earth. 
• A satellite placed in the halo orbit around the L1 point has the major advantage of continuously viewing the Sun without any occultation/eclipses. 
• As the spacecraft will be directly placed in between the Sun and the earth, It will also provide crucial information in understanding the impact of solar activities on near-Earth space weather.

3. Objectives

• Understanding Coronal Heating and Solar Wind Acceleration. 
• Understanding initiation of Coronal Mass Ejection (CME), flares and near-earth space weather. 
• Coupling and Dynamics of the Solar Atmosphere. 
• Solar wind distribution and temperature anisotropy.

4. Uniqueness

• First time spatially resolved solar disk in the NUV band. 
• CME dynamics close to the disk ( ̴1.05 Run) and thereby providing information on the acceleration regime of CME which is not observed consistently. 
• On-board intelligence to detect CMEs and Flares for optimized observations and data volume.

4. Importance of studying the sun

• Every planet, including Earth and the exoplanets beyond the Solar System, evolves and this evolution is governed by its parent star. 
• The solar weather and environment, which is determined by the processes taking place inside and around the sun, affect the weather of the entire system. 
• Variations in this weather can change the orbits of satellites or shorten their lives, interfere with or damage onboard electronics, and cause power blackouts and other disturbances on Earth.
• Knowledge of solar events is key to understanding space weather.

5. Importance for India

• Alongside another mission to the Moon, being planned for next year, and the first human space flight scheduled for 2022, the Indian Space Research Organisation (ISRO) is also preparing to send its first scientific expedition to study the Sun.
• Named Aditya-L1, the mission, expected to be launched early next year, will observe the Sun from a close distance, and try to obtain information about its atmosphere and magnetic field.

6. About Lagrange Point

• In simple words, the Lagrange point is an orbit type in the space between 2 bodies like the Sun and Earth, where the gravitational force of both the planets is balanced. 
• And anything at these points is in a state of equilibrium.
• And for this reason, if you place any satellite or spacecraft at these points, you need very little fuel consumption to move this because the body is free from any repulsion and attraction force.
• That’s why you can also call it parking points of space.

7. Lagrange points of Earth and Sun:

Lagrange Points	Distance from the Earth	Stability	Specifications
L1	1.5 million km	Unstable	This Offers uninterrupted views of the Sun.
L2	1.5 million km	Unstable	The ideal location to study deep space.
L3	301.4 million km	Unstable	This is the Farthest lagrange point from the earth.
L4	—	Stable	60° ahead of earth, Where earth was 2 months ago
L5	—	Stable	60° behind of earth, Where earth will being 2 months time

 

 

 

For Prelims: Lagrange Point, Sun Interiors, Aditya L1 Mission, PSLV, GSLV For Mains:1.Discuss the objectives and significance of the Aditya L1 mission. How does it contribute to our understanding of the Sun-Earth relationship and space weather? 2.Explain the technological challenges associated with sending a spacecraft to the Lagrange point L1 and orbiting the Sun. What are the benefits of placing a satellite at the L1 point?

 

 

Previous Year Questions 1. Aditya L1 is a -----  (ISRO IPCR Assistant Mechanical 2016) A. Long-range Missile B. Spacecraft Project C. Rocket to the moon D.Light Combat Aircraft   Answer (B)

 

 

Source: indianexpress