Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 150
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 150
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Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
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Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Deprecated (16384): The ArrayAccess methods will be removed in 4.0.0.Use getParam(), getData() and getQuery() instead. - /home/brlfuser/public_html/src/Controller/ArtileDetailController.php, line: 151
 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php. [CORE/src/Core/functions.php, line 311]
Code Context


        trigger_error($message, E_USER_DEPRECATED);

    }
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 You can disable deprecation warnings by setting `Error.errorLevel` to `E_ALL & ~E_USER_DEPRECATED` in your config/app.php.'
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deprecationWarning - CORE/src/Core/functions.php, line 311
Cake\Http\ServerRequest::offsetGet() - CORE/src/Http/ServerRequest.php, line 2421
App\Controller\ArtileDetailController::index() - APP/Controller/ArtileDetailController.php, line 151
Cake\Controller\Controller::invokeAction() - CORE/src/Controller/Controller.php, line 610
Cake\Http\ActionDispatcher::_invoke() - CORE/src/Http/ActionDispatcher.php, line 120
Cake\Http\ActionDispatcher::dispatch() - CORE/src/Http/ActionDispatcher.php, line 94
Cake\Http\BaseApplication::__invoke() - CORE/src/Http/BaseApplication.php, line 235
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\RoutingMiddleware::__invoke() - CORE/src/Routing/Middleware/RoutingMiddleware.php, line 162
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Routing\Middleware\AssetMiddleware::__invoke() - CORE/src/Routing/Middleware/AssetMiddleware.php, line 97
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Error\Middleware\ErrorHandlerMiddleware::__invoke() - CORE/src/Error/Middleware/ErrorHandlerMiddleware.php, line 96
Cake\Http\Runner::__invoke() - CORE/src/Http/Runner.php, line 65
Cake\Http\Runner::run() - CORE/src/Http/Runner.php, line 51
Cake\Http\Server::run() - CORE/src/Http/Server.php, line 98

Warning (512): Unable to emit headers. Headers sent in file=/home/brlfuser/public_html/vendor/cakephp/cakephp/src/Error/Debugger.php line=853 [CORE/src/Http/ResponseEmitter.php, line 48]
Code Context
            if (Configure::read('debug')) {

                trigger_error($message, E_USER_WARNING);

            } else {
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    <h1 class="cat-box-title">India needs both price and income support for farmers -Soumya Kanti Ghosh and Debashis Padhi</h1>
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                            <div align="justify">-Livemint.com<br /><br /><em>The concerns about the downsides of these schemes are overblown, and they could go some way in alleviating rural woes<br /></em><br />Since the Union Budget 2018-19, there has been a great deal of discussion in the public domain regarding the health of the rural sector. We believe that the rural sector needs some policy intervention, be it price support or income support. As a case in point, the agri gross domestic product (GDP) deflator has declined from 9.9% in FY13 to merely 1.1% in FY18. Such a decline also coincides with the inflation-targeting regime introduced by the Reserve Bank of India (RBI) from FY13.<br /><br />Importantly, tractor sales are generally considered a proxy for better price realization for the farm sector. During FY18, tractor sales reached an all-time high of 711,000 units, around 22% higher than the previous year. However, the relationship between tractor sales and farm realizations (proxy: agri deflator) is weak as the commercial usage of tractors is increasing rapidly. Now, tractors are being used more for transportation of building material like bricks, stone plates and locally mined sand, as cost of transportation increases massively when commercial vehicles are used for this purpose. Thus, buoyant tractor sales currently are in no way indicative of the health of the rural sector.<br /><br />Also, the high level of non-performing assets (NPAs) in tractor loans indicates that due to rural/agriculture distress, farmers are unable to pay the instalments irrespective of the usage of tractors.<br /><br />Given that prices in the agri sector are at significantly low levels, there are three ways in which we can alleviate this, at least in the short term. The first is to provide better price for all rabi and kharif crops by fixing the minimum support price (MSP) at 1.5 times the cost of production. The second is to develop an institutional mechanism to compensate the price difference where the market price is less than MSP, such as the Bhavantar Bhugtan Yojana (BBY) adopted in Madhya Pradesh. The third is to provide agriculture investment support in the form of cash, as is being currently done in Telangana. We will analyse the pros and cons of all three schemes and suggest what could be done as a quick-fix solution to address the distress without impacting fiscal health and inflation much in the short term.<br /><br /><em>Scheme 1: Fixing MSP at 1.5x cost of production<br /></em><br />In the Union budget, the government has announced that for FY19, MSP for the majority of kharif crops and rabi crops that are left out will be fixed at 1.5 times the cost of production. Estimates show it is based on A2+FL (actual paid out cost plus imputed value of family labour).<br /><br />With the government due to announce MSP for kharif crops in FY19, we estimated what could be the projected MSP for 13 major kharif crops, based on their projected A2+FL cost for FY19 (taken at the maximum growth during FY17-FY18 for any crop), and then applying 1.5 times on it. The projected MSP for FY19 shows that the maximum increase in prices will be on niger-seed (73%) followed by ragi (58%) and jowar (42%).<br /><br />Our estimate suggests that this increment in MSP by 1.5 times in kharif crops and remaining rabi crops could impact consumer price index (CPI) inflation by 71 basis points (bps). For two major crops, wheat and rice, for which the majority of the procurement is done by the government, the increase in MSP will have less impact on inflation.<br /><br />This estimate is based on A2+FL cost and not on C2 cost (comprehensive cost including imputed rent and interest on owned land and capital). If the government settles on 1.5x C2 cost, the inflationary impact could be significantly large, which could even breach the RBI&rsquo;s CPI target (5%) by more than 200 bps.<br /><br />Please <a href="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html" title="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html">click here</a> to read more. <br /></div>                                                           
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    <h1 class="cat-box-title">India needs both price and income support for farmers -Soumya Kanti Ghosh and Debashis Padhi</h1>
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                            <div align="justify">-Livemint.com<br /><br /><em>The concerns about the downsides of these schemes are overblown, and they could go some way in alleviating rural woes<br /></em><br />Since the Union Budget 2018-19, there has been a great deal of discussion in the public domain regarding the health of the rural sector. We believe that the rural sector needs some policy intervention, be it price support or income support. As a case in point, the agri gross domestic product (GDP) deflator has declined from 9.9% in FY13 to merely 1.1% in FY18. Such a decline also coincides with the inflation-targeting regime introduced by the Reserve Bank of India (RBI) from FY13.<br /><br />Importantly, tractor sales are generally considered a proxy for better price realization for the farm sector. During FY18, tractor sales reached an all-time high of 711,000 units, around 22% higher than the previous year. However, the relationship between tractor sales and farm realizations (proxy: agri deflator) is weak as the commercial usage of tractors is increasing rapidly. Now, tractors are being used more for transportation of building material like bricks, stone plates and locally mined sand, as cost of transportation increases massively when commercial vehicles are used for this purpose. Thus, buoyant tractor sales currently are in no way indicative of the health of the rural sector.<br /><br />Also, the high level of non-performing assets (NPAs) in tractor loans indicates that due to rural/agriculture distress, farmers are unable to pay the instalments irrespective of the usage of tractors.<br /><br />Given that prices in the agri sector are at significantly low levels, there are three ways in which we can alleviate this, at least in the short term. The first is to provide better price for all rabi and kharif crops by fixing the minimum support price (MSP) at 1.5 times the cost of production. The second is to develop an institutional mechanism to compensate the price difference where the market price is less than MSP, such as the Bhavantar Bhugtan Yojana (BBY) adopted in Madhya Pradesh. The third is to provide agriculture investment support in the form of cash, as is being currently done in Telangana. We will analyse the pros and cons of all three schemes and suggest what could be done as a quick-fix solution to address the distress without impacting fiscal health and inflation much in the short term.<br /><br /><em>Scheme 1: Fixing MSP at 1.5x cost of production<br /></em><br />In the Union budget, the government has announced that for FY19, MSP for the majority of kharif crops and rabi crops that are left out will be fixed at 1.5 times the cost of production. Estimates show it is based on A2+FL (actual paid out cost plus imputed value of family labour).<br /><br />With the government due to announce MSP for kharif crops in FY19, we estimated what could be the projected MSP for 13 major kharif crops, based on their projected A2+FL cost for FY19 (taken at the maximum growth during FY17-FY18 for any crop), and then applying 1.5 times on it. The projected MSP for FY19 shows that the maximum increase in prices will be on niger-seed (73%) followed by ragi (58%) and jowar (42%).<br /><br />Our estimate suggests that this increment in MSP by 1.5 times in kharif crops and remaining rabi crops could impact consumer price index (CPI) inflation by 71 basis points (bps). For two major crops, wheat and rice, for which the majority of the procurement is done by the government, the increase in MSP will have less impact on inflation.<br /><br />This estimate is based on A2+FL cost and not on C2 cost (comprehensive cost including imputed rent and interest on owned land and capital). If the government settles on 1.5x C2 cost, the inflationary impact could be significantly large, which could even breach the RBI&rsquo;s CPI target (5%) by more than 200 bps.<br /><br />Please <a href="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html" title="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html">click here</a> to read more. <br /></div>                                                           
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        LATEST NEWS UPDATES | India needs both price and income support for farmers -Soumya Kanti Ghosh and Debashis Padhi    </title>
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The concerns about the downsides of these schemes are overblown, and they could go some way in alleviating rural woes

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                            <div align="justify">-Livemint.com<br /><br /><em>The concerns about the downsides of these schemes are overblown, and they could go some way in alleviating rural woes<br /></em><br />Since the Union Budget 2018-19, there has been a great deal of discussion in the public domain regarding the health of the rural sector. We believe that the rural sector needs some policy intervention, be it price support or income support. As a case in point, the agri gross domestic product (GDP) deflator has declined from 9.9% in FY13 to merely 1.1% in FY18. Such a decline also coincides with the inflation-targeting regime introduced by the Reserve Bank of India (RBI) from FY13.<br /><br />Importantly, tractor sales are generally considered a proxy for better price realization for the farm sector. During FY18, tractor sales reached an all-time high of 711,000 units, around 22% higher than the previous year. However, the relationship between tractor sales and farm realizations (proxy: agri deflator) is weak as the commercial usage of tractors is increasing rapidly. Now, tractors are being used more for transportation of building material like bricks, stone plates and locally mined sand, as cost of transportation increases massively when commercial vehicles are used for this purpose. Thus, buoyant tractor sales currently are in no way indicative of the health of the rural sector.<br /><br />Also, the high level of non-performing assets (NPAs) in tractor loans indicates that due to rural/agriculture distress, farmers are unable to pay the instalments irrespective of the usage of tractors.<br /><br />Given that prices in the agri sector are at significantly low levels, there are three ways in which we can alleviate this, at least in the short term. The first is to provide better price for all rabi and kharif crops by fixing the minimum support price (MSP) at 1.5 times the cost of production. The second is to develop an institutional mechanism to compensate the price difference where the market price is less than MSP, such as the Bhavantar Bhugtan Yojana (BBY) adopted in Madhya Pradesh. The third is to provide agriculture investment support in the form of cash, as is being currently done in Telangana. We will analyse the pros and cons of all three schemes and suggest what could be done as a quick-fix solution to address the distress without impacting fiscal health and inflation much in the short term.<br /><br /><em>Scheme 1: Fixing MSP at 1.5x cost of production<br /></em><br />In the Union budget, the government has announced that for FY19, MSP for the majority of kharif crops and rabi crops that are left out will be fixed at 1.5 times the cost of production. Estimates show it is based on A2+FL (actual paid out cost plus imputed value of family labour).<br /><br />With the government due to announce MSP for kharif crops in FY19, we estimated what could be the projected MSP for 13 major kharif crops, based on their projected A2+FL cost for FY19 (taken at the maximum growth during FY17-FY18 for any crop), and then applying 1.5 times on it. The projected MSP for FY19 shows that the maximum increase in prices will be on niger-seed (73%) followed by ragi (58%) and jowar (42%).<br /><br />Our estimate suggests that this increment in MSP by 1.5 times in kharif crops and remaining rabi crops could impact consumer price index (CPI) inflation by 71 basis points (bps). For two major crops, wheat and rice, for which the majority of the procurement is done by the government, the increase in MSP will have less impact on inflation.<br /><br />This estimate is based on A2+FL cost and not on C2 cost (comprehensive cost including imputed rent and interest on owned land and capital). If the government settles on 1.5x C2 cost, the inflationary impact could be significantly large, which could even breach the RBI&rsquo;s CPI target (5%) by more than 200 bps.<br /><br />Please <a href="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html" title="https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html">click here</a> to read more. <br /></div>                                                           
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India needs both price and income support for farmers -Soumya Kanti Ghosh and Debashis Padhi

Published on Jul 4, 2018   Modified on Jul 4, 2018

-Livemint.com The concerns about the downsides of these schemes are overblown, and they could go some way in alleviating rural woes Since the Union Budget 2018-19, there has been a great deal of discussion in the public domain regarding the health of the rural sector. We believe that the rural sector needs some policy intervention, be it price support or income support. As a case in point, the agri gross domestic product (GDP) deflator has declined from 9.9% in FY13 to merely 1.1% in FY18. Such a decline also coincides with the inflation-targeting regime introduced by the Reserve Bank of India (RBI) from FY13. Importantly, tractor sales are generally considered a proxy for better price realization for the farm sector. During FY18, tractor sales reached an all-time high of 711,000 units, around 22% higher than the previous year. However, the relationship between tractor sales and farm realizations (proxy: agri deflator) is weak as the commercial usage of tractors is increasing rapidly. Now, tractors are being used more for transportation of building material like bricks, stone plates and locally mined sand, as cost of transportation increases massively when commercial vehicles are used for this purpose. Thus, buoyant tractor sales currently are in no way indicative of the health of the rural sector. Also, the high level of non-performing assets (NPAs) in tractor loans indicates that due to rural/agriculture distress, farmers are unable to pay the instalments irrespective of the usage of tractors. Given that prices in the agri sector are at significantly low levels, there are three ways in which we can alleviate this, at least in the short term. The first is to provide better price for all rabi and kharif crops by fixing the minimum support price (MSP) at 1.5 times the cost of production. The second is to develop an institutional mechanism to compensate the price difference where the market price is less than MSP, such as the Bhavantar Bhugtan Yojana (BBY) adopted in Madhya Pradesh. The third is to provide agriculture investment support in the form of cash, as is being currently done in Telangana. We will analyse the pros and cons of all three schemes and suggest what could be done as a quick-fix solution to address the distress without impacting fiscal health and inflation much in the short term. Scheme 1: Fixing MSP at 1.5x cost of production In the Union budget, the government has announced that for FY19, MSP for the majority of kharif crops and rabi crops that are left out will be fixed at 1.5 times the cost of production. Estimates show it is based on A2+FL (actual paid out cost plus imputed value of family labour). With the government due to announce MSP for kharif crops in FY19, we estimated what could be the projected MSP for 13 major kharif crops, based on their projected A2+FL cost for FY19 (taken at the maximum growth during FY17-FY18 for any crop), and then applying 1.5 times on it. The projected MSP for FY19 shows that the maximum increase in prices will be on niger-seed (73%) followed by ragi (58%) and jowar (42%). Our estimate suggests that this increment in MSP by 1.5 times in kharif crops and remaining rabi crops could impact consumer price index (CPI) inflation by 71 basis points (bps). For two major crops, wheat and rice, for which the majority of the procurement is done by the government, the increase in MSP will have less impact on inflation. This estimate is based on A2+FL cost and not on C2 cost (comprehensive cost including imputed rent and interest on owned land and capital). If the government settles on 1.5x C2 cost, the inflationary impact could be significantly large, which could even breach the RBI’s CPI target (5%) by more than 200 bps. Please click here to read more.

Livemint.com, 3 July, 2018, https://www.livemint.com/Opinion/ZjAIscjqXQOaIWEoolnUeP/India-needs-both-price-and-income-support-for-farmers.html

Tagged with: Direct Income Support price deficiency payment scheme Price Deficiency Payment System Bhavantar Bhugtan Yojana Remunerative Prices minimum support price Minimum Support Prices Cost of Agricultural Production farming

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