Subsidies PDS Food Security Pdf Download -UPSC Mains -Vision IAS

Subsidies PDS Food Security Pdf Download -UPSC Mains -Vision IAS

Issues related to Direct and Indirect Farm Subsidies and Minimum Support Prices –Right from the time of independence, achieving food security for all has been a national goal. Food Management is an important component in realizing this goal. The main objectives of food management include:

  • procurement of food grains from farmers at remunerative prices,
  • distribution of food grains to consumers at affordable prices; and
  • maintenance of food buffers for food security and price stability.

The government has a number of instruments at its disposal to achieve these objectives.

Subsidies PDS Food Security Pdf Download -UPSC Mains -Vision IAS

1.1 Government’s price policy

  • Government’s price policy seeks to ensure remunerative prices to the farmers for their produce with a view to encourage higher investment and production and to safeguard the interest of the consumers by making available supplies at reasonable prices.
  • The price policy also seeks to evolve a balanced and integrated price structure in the perspective of overall needs of the economy.
  • Towards this end, the Government fixes the Minimum Support Price (MSP) for major agricultural commodities viz. paddy, jowar, bajra, maize, ragi, arhar (tur), moong, urad, cotton, groundnut-in-shell, sunflowerseed, soyabean, sesamum, nigerseed, wheat, barley, gram, masur (lentil), rapeseed/mustard, safflower, copra and Jute and Fair and Remunerative Price (FRP) for sugarcane, taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP), the views of State Governments and Central Ministries as well as other concerned stake holders.

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Minimum Support Price

  • MSP is the price which the government ensures to farmers for their produce. Government announces minimum support price (MSP) for major crops during the two main crop seasons – rabi and kharif – every year.
  • The substantial hike in MSP has resulted in better prices available to farmers for their produce. Successive rise in MSP has also led to overall food security to the country: India is now self-sufficient in wheat and rice.
  • Rice, wheat and major coarse cereals are purchased by procuring agencies under MSP. Government helps producers of pulses, oilseeds and some other crops by market intervention when prices tend to fall below the MSP.
  • The government is strengthening the procurement infrastructure so that farmers do not have to resort to distress sale of their produce.
  • MSP is in the nature of a minimum guaranteed price for the farmers offered by the Government for their produce in case the market prices fall below that level. If the market offers higher price than MSP, the farmers are free to sell their produce at that price.

Fair and Remunerative Price (FRP)

  • The Fair Price is offered in the interest of farmers keeping in view the need for a remunerative price and the present situation of the agriculture. For example: the ‘fair and remunerative price’ of Sugarcane is determined under the Sugarcane (Control) Order 1966.
  • This will be uniformly applicable all over the country. States can top up FRP to give farmers a more remunerative price.
  • The concept of FRP in case of essential commodities such as in place of Statutory Minimum Price (SMP) is in fact a big step forward as it ensures upfront payment towards margins on account of profit and risk to sugarcane farmers on the cost of production and transportation of sugarcane.
  • Moreover, there is a system of State Advisory Prices (SAP) in some States, which are generally higher than the FRP.

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Subsidies PDS Food Security Pdf Download -UPSC Mains -Vision IAS

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