In recommendations made by agricultural scientist MS Swaminathan, the MSP for eligible crops is declared by the Commission for Agricultural Costs and Prices (CACP). In recommendations made by agricultural scientist MS Swaminathan, the MSP for eligible crops is declared by the Commission for Agricultural Costs and Prices (CACP).

The Gujarat Khedut Samaj, a farmers’ outfit in the state, on Sunday called the Minimum Support Price (MSP) hike announced by the Central government, “cheating with farmers” and demanded that the formula be reworked to include the C2 cost, as promised by the BJP during its 2014 election campaign.

“The announcement made by Centre that with a view to increase income of farmers, it has increased MSP for Kharif season 2018-19 by 1.5 times or more will turn out to be misleading. The BJP government in 2014 promised that it will decide MSP after adding 50 per cent to A2+C2 cost as suggested by National Commission on Farmers, headed by MS Swaminathan…However, the government has cleverly declared MSP by adopting A2+FL cost formula which does not take into account rentals and interest foregone on owned land and fixed capital assets but which are covered in A2+FL+C2 formula,” Vipinchandra Patel, secretary of Gujarat Khedut Samaj said on Sunday.

In recommendations made by agricultural scientist MS Swaminathan, the MSP for eligible crops is declared by the Commission for Agricultural Costs and Prices (CACP). The CACP has three different definitions of productions costs – A2 (actual paid out cost which includes cost of seeds, fertilisers, pesticides, hired labour, fuel etc), A2+FL (actual paid out cost plus imputed value of family labour) and C2 (comprehensive cost including imputed rent and interest on owned land and capital). As is evident, C2 > A2+FL > A2. On July 4, the Central government declared the MSP for Kharif season 2018-19.

While announcing the decision, Union Home minister Rajnath Singh said that the ‘historic’ decision translated to around 200 per cent increase in MSP over last year. He explained that the government had adopted the A2=FL cost formula to arrive at production cost of a crop and had added 50 per cent on that production cost to fix MSP for the next season. However, Patel said that the NDA government’s announcement was not new.

“This formula of A2+FL has been in employed before 2014. The government has used the same formula and has thus added insult to injury for farmers. Government procures many produces. In the past, barring foodgrain, farmers have got prices more than 50 per cent of A2. But invariably, they have been lower than C2. In 2014, Modi had promised to give farmers C2+50 per cent as MSP. But his government is now misleading farmers. In 2013, the BJP demanded that the then UPA government declare Rs 2,100 as MSP for wheat. But today, the BJP government has declared Rs 1,735 as MSP for wheat…This is cheating with farmers. The government should keep its promises or be prepared to face results,” the farmer leader said.

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