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LATEST NEWS UPDATES | Explained: What is the basis of MSP? How is it fixed, and how binding is it? -Harish Damodaran

Explained: What is the basis of MSP? How is it fixed, and how binding is it? -Harish Damodaran

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published Published on Sep 25, 2020   modified Modified on Sep 25, 2020

-The Indian Express

The newly passed farm trade Bill has raised concerns that farmers may no longer be assured MSP for their crop. But MSP isn’t even mentioned in the new law or in existing ones. How is it fixed, and how binding is it?

The recently enacted law that dismantles the monopoly of APMC (agricultural produce market committee) mandis, thereby allowing sale and purchase of crops outside these state government-regulated market yards, may not have faced serious farmer opposition had it included a provision safeguarding the continuance of the existing minimum support price (MSP)-based procurement regime.

A mere sentence, to the effect that nothing in this Act shall stop the government from announcing MSPs and undertaking crop purchases at these rates as before, might have blunted any criticism of the new law being “anti-farmer”.

* What does the law say about MSP?

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill does not give any statutory backing to MSP. Forget making it a legal right, there isn’t even a mention of either “MSP” or “procurement” in the Bill passed by both Houses of Parliament last week.

Agriculture Minister Narendra Singh Tomar has said the new legislation has “nothing to do with MSP”. Instead, its objective is simply to grant farmers and traders the freedom of choice to sell and buy agricultural produce outside the premises of APMC mandis. MSP and procurement, according to him, are entirely separate issues: “MSP was not part of any law before. Nor is it part of any law today.”

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The Indian Express, 25 September, 2020, https://indianexpress.com/article/explained/what-is-the-basis-of-msp-6609668/


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