Syllabus: GS-III
Subject: Economic Development
Topic: Minimum Support Price
Context: The Cabinet Committee on Economic Affairs (CCEA) in India has announced a significant increase in the minimum support price (MSP) for copra, a key coconut product.
Synopsis:
- The MSP for milling copra has been increased by ₹300 per quintal compared to the previous season, while the MSP for ball copra reflecting a ₹250 per quintal hike.
- Despite global declines in copra prices, the government, aims to ensure that the MSP remains at least 50% higher than the production cost. The elevated MSP aims not only to ensure better returns for coconut growers but also to motivate farmers to expand copra production, meeting the rising demand for coconut products both domestically and internationally.
- Milling copra is primarily used for oil extraction, while ball copra serves as a dry fruit and is used for religious purposes.
- Major copra-producing states include Kerala, Tamil Nadu, and Karnataka.
- The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and the National Cooperative Consumers’ Federation (NCCF) act as Central Nodal Agencies (CNAs) for the procurement of copra and de-husked coconut under the Price Support Scheme (PSS).
Background:
Minimum Support Price(MSP):
- It is a support price announced by government to insure agricultural producers (farmers) against any sharp fall in farm prices.
- At the beginning of the sowing season, both kharif (June-July) and Rabi(Oct-Nov)
- Recommendation of Commission for Agricultural Costs and Prices (CACP) under Ministry of Agriculture and Family Welfare. Ultimate decision taken by CCEA.
- MSP is announced for 22 crops (14 kharif and 6 rabi crops and two other commercial crops) besides a Fair and Remunerative price for sugarcane.
- National Commission on farmers headed by M.S Swaminathan recommended MSP of at least 50% above the production cost of the crop.
