Farmers are demanding a legal guarantee that all farmers will receive remunerative prices for all their crops.
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The Central Government sets a minimum support price (MSP) for 23 crops every year, based on a formula of one-and-a-half times production costs.
This takes into account both paid-out costs (A2) such as seeds, fertilizers, pesticides, fuel, irrigation, hired workers and leased-in land, as well as the imputed value of unpaid family labour (FL).
Farm unions are demanding that a comprehensive cost calculation (C2) must also include capital assets and the rentals and interest forgone on owned land as recommended by the National Commission for Farmers.
There is currently no statutory backing for these prices, nor any law mandating their enforcement. The government only procures about a third of wheat and rice crops at MSP rates (of which half is bought in Punjab and Haryana alone), and 10%-20% of select pulses and oilseeds.
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