Growers forced to sell maize below MSP in Punjab

The state government has been actively promoting maize cultivation as part of its crop diversification plans. However, its own agencies have failed to come to the rescue of maize growers, who are forced to sell their produce at 40-60 per cent less than the minimum support price (MSP) of the crop.

farmers are getting just Rs 600 (with high moisture content) to Rs 1,100 (dry crop) per quintal from private traders. The MSP of maize, announced by the government this year, is Rs 1,850 per quintal.

State government officials try to shirk their responsibility by saying they are not intervening in the mandis for spring maize, as it is not promoted by the state. Just like ‘saathi dhaan’, spring maize is a water-guzzling crop and is thus not promoted.

Minimum Support Price
The MSP is the rate at which the government buys grains from farmers.
Reason behind the idea of MSP is to counter price volatility of agricultural commodities due to the factors like variation in their supply, lack of market integration and information asymmetry.

Fixation of MSP
The MSP is fixed on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
Factors taken into consideration for fixing MSP include:
Demand and supply;
Cost of production (A2 + FL method)
Price trends in the market, both domestic and international;
Inter-crop price parity;
Terms of trade between agriculture and non-agriculture;
A minimum of 50% as the margin over cost of production; and
Likely implications of MSP on consumers of that product.