Agriculture, Consumer Affairs Ministries Differ On Msp

While consumer affairs and public distribution minister Shanta Kumar blames the high MSP for the present glut in the market and inability to export, agriculture minister Nitish Kumar says it is an absolute necessity for the country's food security.

"MSP is unrealistic. Instead of 'minimum' support price it has become 'maximum' support price. It is also not in trend with the current market situation," Shanta Kumar said.

He said due to the high support price government godowns were overflowing with wheat. Moreover, domestic offtake has also gone down due to the higher procurement cost.

Strongly defending remunerative prices, Nitish Kumar said "MSP is not unrealistic. It is a mechanism to help farmers. We can not do away with the system as it is an incentive to farmers and necessary to attain food security in the country."

Commission for agricultural costs and prices (CACP), the nodal body which recommends support price of foodgrains, had also expressed concern over fixing the support price higher than the recommendation of the commission.

"Agriculture ministry has the final authority to fix the support price and cacp is only a recommendatory body. We have to consider farmers' interest also while fixing the MSP," the agriculture minister said.

Kumar said the minimum support price was putting additional burden on the government and discouraging exports.

"Higher MSP also increases price of the foodgrains domestically, making our rice and wheat unviable in the international market and though we are saddled with excess stocks we cannot export them," the minister said.

The agriculture minister said instead of finding fault with MSP, the central procurement agency Food Corporation India should be decentralised to strengthen public distribution system (PDs) in the country.

"There is nothing wrong with the system of MSP. There is a need to make the entire PDs mechanism more efficient," he said.

Currently, the government is burdened with a foodgrain stock of around 37 million tonne, about 13 million tonne in excess of the minimum buffer stock needed for food security.

The stock of wheat alone is estimated at around 22 million tonne, against the minimum buffer requirement of 14 million tonne at this time of the year.

The government's efforts to export excess wheat has also not taken off as the loan or barter scheme has failed to evince any interest so far.