New System To Fix Farm Procurement Prices Soon Soonthe Anvil

At present, the minimum support prices fixed by the Centre on the basis of the recommendations of the Commission on Agricultural Costs and Prices (CACP) are generally uniform throughout the country. Some state governments, at times, gives extra bonus to the local farmers from their own funds owing to political exigencies.

According to agriculture minister Chaturanan Mishra, the new system would offer higher prices to those states which have the capability to produce surplus food. This would drastically reduce the transportation cost for moving foodgrains from Punjab and Haryana to the rest of the country, he told the Business Standard.

 

He said he would discuss this issue with the CACP in a day or two and would ask it to do the needful in this direction.

If Orissa could, for instance, produce surplus rice for meeting the needs of the nearby states, we would offer relatively higher support price for rice to growers in this state as an incentive to raise output. Similarly, if some other states has conditions suitable for increasing wheat production, could be given higher prices for wheat, Mishra said.

He pointed out that the country was incurring an expenditure of nearly Rs 1,050 crore on transportation of foodgrains alone. This could be brought down substantially if other states were provided incentives to raise their production.

The higher prices being offered to farmers in such states would not pose any additional burden on the exchequer, the minister said. This expenditure would be met out of the saving on transportation costs.

Besides, this would give room for farmers in the present food surplus areas like Punjab, Haryana and other regions to diversify agricultural patterns. These areas could go in for high-value crops with good export potential.