Stagnant farm wages a drag on minimum support prices

Farm wages have been stagnant, contracting by 1.5% in 2015-16 and growing 1.7% in 2016-17

A slow growth in farm labour wages and more than 50 per cent weight to wages in the cost calculation index have pulled down the projection of overall cost of cultivation for various crops. 

As minimum support prices (MSPs) are fixed at 50 per cent or more than the production cost (A2+FL), the impact of wages on the resultant MSP cannot be ruled out. Expenditure on other major inputs, namely seeds and machine labour—including tractors—is rising faster than before, while that on fertilisers is growing steadily in the last three years, the recent price policy report of the Commission for Agriculture