Market prices and skewed procurementhttps://indianexpress.com/article/business/business-others/market-prices-and-skewed-procurement-2870158/

Market prices and skewed procurement

If farmers in eastern India were to realise better market prices, concerted efforts have to be made to enhance official procurement in the region, the CACP has pointed out.

Indian Farmers, eastern India farmers, minimum support price, MSP crop, Commission for Agricultural Costs, CACP, india news
According to the CACP, about 37.3 per cent of the country’s total estimated marketed surplus of paddy in 2014-15 was procured by government agencies. (Reuters photo)

Farmers in eastern India are worst-placed with regard to receiving the government’s minimum support price (MSP) for their crop.

An analysis of wholesale market prices of paddy in the eastern states — comprising Assam, Bihar, eastern Uttar Pradesh and West Bengal — by the Commission for Agricultural Costs and Prices (CACP) shows these to have averaged below their corresponding MSPs for much of the last five years. This wasn’t the case in other major paddy-producing states — Andhra Pradesh, Tamil Nadu, Chhattisgarh, Odisha, Punjab, Haryana and western UP — where, as the accompanying table shows, average wholesale market prices almost consistently ruled above the MSPs.

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The main reason for this is the absence of a robust government procurement system in eastern India, notwithstanding region’s acknowledged potential to bring about the country’s “second” Green Revolution in view of its relatively abundant rainfall and groundwater resources.

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According to the CACP, about 37.3 per cent of the country’s total estimated marketed surplus of paddy in 2014-15 was procured by government agencies. But this ratio was a mere 0.4 per cent for Assam, 14.9 per cent for UP, 17 per cent for West Bengal and 24.2 per cent for Bihar. On the other hand, state agencies procured 72.8 per cent of the marketed surplus of paddy in Punjab, with these similarly high at 72.4 per cent for Chhattisgarh, 67.2 per cent for Andhra Pradesh, 62.7 per cent for Haryana and 57 per cent for Odisha.

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If farmers in eastern India were to realise better market prices, concerted efforts have to be made to enhance official procurement in the region, the CACP has pointed out.