Budget announcements on the farm sector: Markets, not MSP, is the focus

Analysts and observers are debating on how the cost of cultivation will be calculated

The Budget announcements on the farm sector, especially the one that commits to ensure a minimum support price (MSP) for crops that is equal to 1.5 times the cost of production — which the Swaminathan Commission Report had recommended in 2006 — raised many eyebrows. Analysts have been debating how the cost of cultivation will be calculated, and whether the cost — A2+FL, which includes actual expenses in cash and kind, including rent paid for leased-in land along with imputed value of family labour—will be considered or the more comprehensive cost C2, which includes imputed rent for the owned land,