India: Cabinet approves higher minimum support prices for Kharif crops

  • The Cabinet has approved higher support prices for kharif, or summer-sown crops, a new labour code that will allow minimum wages to be paid by cheque or bank transfers to workers of both organised and unorganised sectors.
  • The government said the increase in minimum support prices (MSP) for kharif crops, approved by the Cabinet Committee on Economic Affairs, is in line with giving farmers 1.5 times the cost of production.
  • Agriculture minister Narendra Singh Tomar said higher MSP would increase investment and production. “We are determined to double the income of farmers. The increased prices will help in improving financial condition of farmers,” he said.
  • The new prices evoked a mixed reaction from activists and farm leaders. Randheer Singh Shekhawat, president at Indian Farmers Union (IFU), said the increase in MSP will certainly help farmers.
  • But Sudhir Panwar, president of Kisan Jagriti Manch, said the increase was not enough. “The hike is minuscule. It’s not going to help the farmers. Moreover, due to deficient monsoon, the cost of input is going to be high in 2019. So, the increase will not meet the expenses,” he said.
  • The national convenor of All India Kisan Sangharsh Coordination Committee VM Singh said only 5% farmers were able to get the benefit of MSP, which makes it meaningless unless the government guarantees purchases.
  • The Cabinet also approved the labour code on wages, paving way for minimum wages to workers of both organised as well as unorganised sectors directly in their bank accounts or through cheque.
  • Meanwhile, the government plans to infuse INR65bn equity in state-run Food Corporation of India (FCI) to shore up its authorised capital from INR35bn to INR100bn. This will help FCI to enhance its borrowing capacity and raise more money through bonds to take care of its procurement operations.
  • The move is in line with the recommendation of Parliamentary Standing Committee on Food and Public Distribution, headed by J C Divakar Reddy, which has suggested restructuring of the FCI capital in order to enhance equity and to raise long-term debt for meeting the working capital requirement.
  • The panel has also recommended that FCI should raise INR320bn in next two years to carry out its primary duty of undertaking purchase, storage, movement, transport, distribution and sale of foodgrains.

External Link : https://economictimes.indiatimes.com/news/economy/agriculture/cabinet-approves-higher-minimum-support-prices-for-kharif-crops/articleshow/70065838.cms

4-Jul-2019


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