NEW DELHI: Countering opposition parties’ allegation of adopting inadequate method of fixing minimum support price (MSP) of farm produce, the Prime Minister Narendra Modi on Saturday said many people were “spreading confusion and creating atmosphere of despair” regarding the government's decision and assured farmers that all major costs incurred would be taken into account to fix the support price as promised in the Budget.

“It’s (government’s decision to fix MSP at minimum one-and-a-half-times the cost of production) is an important step related to income of hard-working farmers. We have been working with the state governments so that farmers can be benefited from it”, said Modi while addressing gathering of farmers and agriculture scientists here at ‘ Krishi Unnati Mela ’ at IARI ground, Pusa.

He explained that the cost of production would include elements such as hired labour, expenses on farmers’ own or rented machinery as well as livestock, cost of seeds and fertilisers, expenses on irrigation, revenue being given to state government, interest on working capital and rent of leased land among others.

“It will also include labour put by farmers and their family members”, said the Prime Minister, referring to what is called A2+FL (actual paid out cost plus imputed value of unpaid family labour) formula of calculating cost of production.

Though the finance minister Arun Jaitley and agriculture minister Radha Mohan Singh had explained it at several occasions, a section of farmers’ organisations and political parties have been demanding use of comprehensive cost (C2) formula which takes into account rental value of owned land and interest on fixed capital apart from A2+FL.

The demand had its echo at recent farmers’ protest march in Maharashtra and even during the ongoing ‘MSP Satyagraha’, being organised by the Jai Kisan Andolan of Swaraj Abhiyan in collaboration with many other farmer organisations across eight states.

The Prime Minister’s assurance to farmers on support price on Saturday may not put an end to the debate over the method of calculating cost of production for fixing the MSPs, but it gave enough signal that the government’s focus would mainly be on procurement and many pending proposed legislations at state-level to ensure remunerative prices of farm produce to farmers.

Modi said several Model Acts (agriculture marketing, contract farming and land leasing) related to farmers’ welfare have been prepared and “states have been urged to implement them”. He enlisted all the measures which were being taken by the government in the last couple of years to achieve its goal of doubling farmers’ income.

The Prime Minister also appealed farmers not to burn crop residues so that air pollution can be curbed. He sought to impress upon them the importance of available alternatives, saying if the crop residue is returned to the soil through machines, it’ll have beneficial effects.

Modi, on the occasion, launched e-marketing portal for organic products and laid foundation stone of 25 ‘ Krishi Vigyan Kendras ’ (KVKs) which provide field-level extension and advisory services to farmers across the country. Stressing on the need to go for ‘organic (farming) revolution’ in the country, he said the KVKs would play a key role in this regard.

The Prime minister in his speech also emphasised on importance of Farmer Producer Organisations (FPOs) in marketing farm produce and getting better prices. He said farmers can market their produce in a better way through FPOs, which has been exempted from income tax, on the lines of cooperative societies, in the Budget.

