CACP wants review of government procurements, Centre wants them unchanged

NEW DELHI: The Commission for Agricultural Cost and Prices (CACP) that recommends minimum support price (MSP) for 22 crops had suggested in July that open-ended procurement of wheat and rice should be reviewed so that farmers are encouraged to plant other crops such as oilseeds, pulses and nutri-cereals.

The government, however, has continued with the existing MSP operations without any changes and has given an assurance in Parliament that there would be absolutely no change in official procurement at declared prices. It said procurement should be strengthened in other states.

Currently, government has no cap on wheat and rice procurement within a specified period. It procures around three-fourth of marketable wheat in Madhya Pradesh, Punjab and Haryana, driving out private players from the market.


High procurement of wheat and rice in some states discourages much-needed crop diversification, it said.

“For example, oilseeds and maize have great potential to replace rice-wheat cropping system in Punjab and Haryana but farmers do not get assured remunerative prices for these crops. Since there is no assured procurement of these crops and generally, market prices remain well below the MSP, farmers have no incentive to switch to these crops,” the commission said.

It said a review of procurement practices would encourage farmers to plant other crops. “The commission also recommends that open-ended procurement policy for rice and wheat should be reviewed and farmers should be incentivised to shift to oilseeds, pulses and nutri-cereals through effective procurement policy for these crops under PM-AASHA,” it said.

It said excessive procurement was driving out private trade in some states. It also recommended strengthening procurement operations in states like Uttar Pradesh, Rajasthan and Bihar where wheat procurement is much lower than their share in total marketed surplus and production.

The commission also strongly recommended a major policy change in pricing, procurement and use of other crops like oilseeds, pulses, maize and nutri-cereals to encourage farmers to shift to these crops, which have great potential for crop diversification.

The commission also stressed on the need to continue subsidising fertilisers. It recommended direct benefit transfer of Rs 5000 per year as subsidy in two equal instalment to farmers — each at the beginning kharif and rabi season.

“Farmers can make choices about use of different nutrients based on soil nutrient status. This would allow industry to introduce more efficient products such as water-soluble fertilisers, slow-release fertilisers and customised fertilisers, which will not only improve crop productivity but also check soil degradation,” the report said.