SHIKHAR MAINS 2022- DAY 44 Model Answer English

Q1. न्यूनतम समर्थन मूल्य (MSP) क्या है? साथ ही इससे जुड़ी चुनौतियों की भी चर्चा कीजिए।  

What is Minimum Support Price (MSP)? Also discuss the challenges associated with it.

Approach:

·        Begin the answer by giving a general introduction of the Minimum Support Price.

·        After this, expand the answer by writing about CACP.

·        Further mention its advantages and challenges.

·        Conclude accordingly.

Answer:

Minimum Support Price is an intervention by the government in the form of price support to provide protection to the farmers against any sharp fall in the agricultural prices. The Minimum Support Price ensures a guaranteed offtake price which is also beneficial to the farmers.

The main objective of MSP is to save farmers from distress sale and purchase of food grains for the public distribution system. The objective of MSP is to encourage investment in modern technologies for agriculture by ensuring assured income to the farmers.

The Minimum Support Price is announced by the Government of India on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). The Commission for Agricultural Costs and Prices is a statutory body, which submits various reports recommending prices for Kharif and Rabi seasonal crops. Minimum Support Price is declared before the sowing season for 23 crops including rice, wheat, pulses etc.

The Commission for Agricultural Costs and Prices submits its recommendations to the government in the form of price policy reports every year for five groups of different commodities, namely Kharif crops, Rabi crops, sugarcane, raw jute and copra.

After considering the reports and views of the State Governments and keeping in view the overall demand and supply situation in the country, the Central Government takes the final decision. 

Over the years, MSP has become a major aspect of government assistance to farmers. The minimum support price has benefited a lot.

·        It has ensured food security for the citizens.

·        This has ensured efficient implementation of the Public Distribution System (PDS).

·        It has provided assured cash flow to the farmers.

·        This has helped in containing the fluctuations in the prices of food crops.

·        However, over the years, several concerns have emerged regarding the MSP. 

Issues related to Minimum Support Price:

·        The formula used by the government for fixing the minimum support price and the demand of the farmers for the minimum support price is not in sync.

·        The government declares the MSP on the basis of the formula A2+Family Labour (FL), where A2=input cost (seeds, fertilisers, machinery, labour, etc.).

·        Farmers' demand is 1.5 times C2, which is equal to the government MSP + the cost of rent plus interest on the land owned.

·        In this context, the National Commission for Farmers, commonly known as M.S. Swaminathan Committee, had recommended a formula for a minimum support price (MSP) to match the demands of the farmers. Implementation of the Swaminathan Committee formula remains a major issue.

·        MSP has distorted the cropping pattern, resulting in the preference of water consuming crops like rice over traditional crops like pulses, millets etc.

·        MSP involves an open-ended buying mechanism. Therefore, most of the products procured through MSP reduce the supply in the open markets. As a result, the consumption of non-cereals is increasing leading to nutritional issues.

·        More procurement is done under MSP, but lack of proportionate storage facilities leads to wastage of produce.

·        According to the report of Shanta Kumar Committee on Role and Restructuring of Food Corporation of India, selling wheat and paddy directly to any procurement agency benefits only 6% of farmers. Despite being disputed, this figure points to the wide disparity in access to MSPs across sectors.

·        Internationally, the MSP has been a cause of conflict between India and the developed world at the World Trade Organization (WTO). MSP is included in the amber box as a subsidy which distorts production and should be abolished.

·        Minimum Support Price has also discouraged private sector participation in agriculture. Therefore, the gains that could have been made by private sectors have been lost.

The Minimum Support Price was seen as a safety net for the farmers. However, despite its noble intentions, concerns regarding it have only grown. There is a dire need of reforms in the implementation of the Minimum Support Price. Recent agricultural reforms have given rise to a debate on the same. The grievances of farmers should be addressed while formulating policies for MSP reforms.

Q2. सार्वजनिक वितरण प्रणाली से आप क्या समझते हैं? भारत में सार्वजनिक वितरण प्रणाली की चुनौतियों को रेखांकित करते हुए दूर करने के उपायों की चर्चा कीजिये।

What do you understand by Public Distribution System? Outlining the challenges of Public Distribution System in India, and discuss the measures to overcome them.

Approach:

·        Begin the answer with the background of Public Distribution System.

·        Explain PDS.

·        Discuss the challenges in the PDS system.

·        Discuss the ways to overcome these challenges.

Answer:

Public distribution system

·        Public Distribution System is a scheme to sell essential commodities through Fair Price Shops (FPS) at subsidized prices. It is 100% Centrally Sponsored Scheme. For this Food Corporation of India (FCI) procures on MSP/PP basis and sells to the states at Central Issue Price (CIP). The state government sells through FPS to the consumers at the issue price (IP). The issue price may vary depending on the category of consumers. The objective of the Public Distribution System is to ensure the availability of food grains to the citizens at affordable prices. Public distribution system has played an important role in controlling hunger and malnutrition in India, but at present this scheme suffers from various shortcomings.

Disadvantages of Public Distribution System:

·        Public Distribution System is facing the problem of leakage. According to Shanta Kumar Committee, 40 to 50% leakage occurs in the Public Distribution System.

·        There is presence of ambiguity in the goals in the Public Distribution System. Some eligible citizens are not able to take advantage of it while some ineligible citizens are taking advantage of it.

·        It presents distribution related challenges like issuance of cards, quantity and quality issues, record keeping, weather related etc.

·        There is often a delayed supply of food grains in the Public Distribution System which hampers the food security of the beneficiaries, besides only occasional opening of FPS hinders the achievement of the objectives of the government.

·        In states where infrastructure is better, the supply is smooth, but states where infrastructure is weak there is a regional disparity in distribution.

·        Apart from this, the Public Distribution System is also facing the shortcomings like administrative inefficiency of FCI such as inability to properly store food grains, food grains wastage etc.

·        Loss of food grains - Due to lack of proper management, leakages in warehouses, exposure to floods, non-adoption of preventive measures, etc., from the year 2011-12 to the year 2016-17, about 61824 tonnes of food grains were damaged.

·        The burden of food subsidy has increased due to the enactment of the National Food Security Act 2013.

Measures to overcome the problems related to PDS.

Procurement Side Reforms –

·        States with sufficient work experience in this direction should be encouraged to buy directly from farmers. Like Andhra Pradesh, Chhattisgarh, Punjab, Haryana and Madhya Pradesh

·        FCI should also pay special attention to the farmers (eg Eastern Uttar Pradesh, Bihar, West Bengal, Assam etc.) forced to make emergency sale of food grains at a price less than the MSP where small plots predominate on a large scale.

·        The private sector should be encouraged to take responsibility for procurement, storage and distribution of PDS food grains/commodities.

·        Negotiable warehouse receipt system (NWRs) should be adopted on priority and promoted expeditiously.

·        The Government of India should widen its procurement basket to include adequate nutritional mix.

Supply Side Reforms-

·        Centralized online real time electronic PDS (Core PDS) can be used.

·        Tracking the location of trucks and available stock information will be available to the registered consumers through SMS.

·        All the information regarding the collection and distribution of ration at the ration shop can be made available on the website.

·        Fair Price Shops (FPS) should be operated through Gram Panchayats, Co-operative Societies, Self-Help Groups etc.

·        GPS monitoring of trucks carrying PDS related items.

Consumer Side Reforms-

·        A web database of allotment as per the identity and eligibility of the PDS beneficiaries should be created.

·        The facility of computerized entry through Aadhaar authentication should be provided at POS.

·        Cash transfers in PDS should be piloted, starting with large cities with a population of more than 1 million, then expanding to states with surplus food grains and then providing the option of cash or physical distribution of food grains to deficient states.

·        Toll free number should be provided for lodging complaints.

The people running all the ration shops under the PDS scheme will be accountable to the consumers. The state government can provide the option to buy ration from the shop of its choice.

          All these features have been adopted by Chhattisgarh which has greatly improved the PDS system and has also reduced leakages significantly. The system can be made effective by adopting these features in all the states.