Recently, the Cabinet Committee on Economic Affairs approved an increase in the Minimum Support Prices (MSPs) for Kharif crops for the 2018-19 marketing season. Subsequently, the Commission for Agricultural Costs and Prices (CACP) released its price policy report for Kharif crops for the marketing season 2018-19.
The central government notifies MSPs based on the recommendations of the CACP. These recommendations are made separately for the Kharif marketing season (KMS) and the Rabi marketing season (RMS). Post harvesting, the government procures crops from farmers at the MSP notified for that season, in order to ensure remunerative prices to farmers for their produce.
In this blog post, we look at how MSPs are determined, changes brought in them over time, and their effectiveness for farmers across different states.
How are Minimum Support Prices determined?
The CACP considers various factors such as the cost of cultivation and production, productivity of crops, and market prices for the determination of MSPs. The National Commission on Farmers(Chair: Prof. M. S. Swaminathan) in 2006 had recommended that MSPs must be at least 50% more than the cost of production. In this year’s budget speech, the Finance Minister said that MSPs would be fixed at least at 50% more than the cost of production.
The CACP calculates cost of production at three levels: (i) A2, which includes cost of inputs such as seeds, fertilizer, labour; (ii) A2+FL, which includes the implied cost of family labour (FL); and (iii) C2, which includes the implied rent on land and interest on capital assets over and above A2+FL.
Table 1 shows the cost of production as calculated by the CACP and the approved MSPs for KMS 2018-19. For paddy (common), the MSP was increased from Rs 1,550/quintal in 2017-18 to Rs 1,750/quintal in 2018-19. This price would give a farmer a profit of 50.1% on the cost of production A2+FL. However, the profit calculated on the cost of production C2 would be 12.2%. It has been argued that the cost of production should be taken as C2 for calculating MSPs. In such a scenario, this would have increased the MSP to Rs 2,340/quintal, much above the current MSP of Rs 1,750/quintal.
Which are the major crops that are procured at MSPs?
Every year, MSPs are announced for 23 crops. However, public procurement is limited to a few crops such as paddy, wheat and, to a limited extent, pulses as shown in Figure 1.
The procurement is also limited to a few states. Three states which produce 49% of the national wheat output account for 93% of procurement. For paddy, six states with 40% production share have 77% share of the procurement. As a result, in these states, farmers focus on cultivating these crops over other crops such as pulses, oilseeds, and coarse grains.
Due to limitations on the procurement side (both crop-wise and state-wise), all farmers do not receive benefits of increase in MSPs. The CACP has noted in its 2018-19 price policy report that the inability of farmers to sell at MSPs is one of the key areas of concern. Farmers who are unable to sell their produce at MSPs have to sell it at market prices, which may be much lower than the MSPs.
How have MSPs for major crops changed over time?
Higher procurement of paddy and wheat, as compared to other crops at MSPs tilts the production cycle towards these crops. In order to balance this and encourage the production of pulses, there is a larger proportional increase in the MSPs of pulses over the years as seen in Figure 2. In addition to this, it is also used as a measure to encourage farmers to shift from water-intensive crops such as paddy and wheat to pulses, which relatively require less water for irrigation.
What is the effectiveness of MSPs across states?
The MSP fixed for each crop is uniform for the entire country. However, the production cost of crops vary across states. Figure 3 highlights the MSP of paddy and the variation in its cost of production across states in 2018-19.
For example, production cost for paddy at the A2+FL level is Rs 702/quintal in Punjab and Rs 2,102/quintal in Maharashtra. Due to this differentiation, while the MSP of Rs 1,750/quintal of paddy will result in a profit of 149% to a farmer in Punjab, it will result in a loss of 17% to a farmer in Maharashtra. Similarly, at the C2 level, the production cost for paddy is Rs 1,174/quintal in Punjab and Rs 2,481/quintal in Maharashtra. In this scenario, a farmer in Punjab may get 49% return, while his counterpart in Maharashtra may make a loss of 29%.
Figure 4 highlights the MSP of wheat and the variation in its cost of production across states in 2017-18. In the case of wheat, the cost of production in Maharashtra and West Bengal is much more than the cost in rest of the states. At the A2+FL level, the cost of production in West Bengal is Rs 1,777/quintal. This is significantly higher than in states like Haryana and Punjab, where the cost is Rs 736/quintal and Rs 642/quintal, respectively. In this case, while a wheat growing farmer suffers a loss of 2% in West Bengal, a farmer in Haryana makes a profit of 136%. The return in Punjab is even higher at 1.5 times or more the cost of production.
The Juvenile Justice (Care and Protection of Children) Bill, 2015 is currently pending in Rajya Sabha and was listed for passage in the current Winter session of Parliament. The Bill was passed by Lok Sabha after incorporating certain amendments, in May 2015. Here is all you need to know about the Bill and key issues associated with it. A PRS analysis of the statistics on incidence of crimes by children and conviction rates is available here.
| Table 1: Juveniles between 16-18 years apprehended under IPC | |||
| Crime |
2003 |
2013 |
|
| Burglary |
1,160 |
2,117 |
|
| Rape |
293 |
1,388 |
|
| Kidnapping/abduction |
156 |
933 |
|
| Robbery |
165 |
880 |
|
| Murder |
328 |
845 |
|
| Other offences |
11,839 |
19,641 |
|
| Total |
13,941 |
25,804 |
|
| Note: Other offences include cheating, rioting, etc. Sources: Juveniles in conflict with law, Crime in India 2013, National Crime Records Bureau; PRS. | |||
Who is a juvenile as recognised by law? In the Indian context, a juvenile or child is any person who is below the age of 18 years. However, the Indian Penal Code specifies that a child cannot be charged for any crime until he has attained seven years of age. Why is there a need for a new Bill when a juvenile justice law already exists? The government introduced the Juvenile Justice Bill in August 2014 in Lok Sabha and gave various reasons to justify the need for a new law. It said that the existing Juvenile Justice Act, 2000 was facing implementation issues and procedural delays with regard to adoption, etc. Additionally, the government cited National Crime Records Bureau (NCRB) data to say that there has been an increase in crimes committed by juveniles, especially by those in the 16-18 years age group. NCRB data shows that the percentage of juvenile crimes, when seen in proportion to total crimes, has increased from 1% in 2003 to 1.2% in 2013. During the same period, 16-18 year olds accused of crimes as a percentage of all juveniles accused of crimes increased from 54% to 66%. However, the type of crimes committed by 16-18 year olds can be seen in table 1. What is the new Bill doing? Currently, the Juvenile Justice (Care and Protection of Children) Act, 2000 provides the framework to deal with children who are in conflict with law and children in need of care and protection. The Bill seeks to replace the existing 2000 Act and lays down the procedures to deal with both categories of children. It highlights the two main bodies that will deal with these children, to be set up in each district: Juvenile Justice Boards (JJBs) and Child Welfare Committees (CWCs). It provides details regarding adoption processes and penalties applicable under the law. The Bill provides for children between 16-18 years to be tried as adults for heinous crimes. The three types of offences defined by the Bill are: (i) a heinous offence is an offence that attracts a minimum penalty of seven years imprisonment under any existing law, (ii) a serious offence is one that gets imprisonment between three to seven years and, (iii) a petty offence is penalized with up to three years imprisonment. Currently, how is a juvenile in conflict with law treated? How is that set to change? Under the 2000 Act, any child in conflict with law, regardless of the type of offence committed, may spend a maximum of three years in institutional care (special home, etc.) The child cannot be given any penalty higher than three years, nor be tried as an adult and be sent to an adult jail. The proposed Bill treats all children under the age of 18 years in a similar way, except for one departure. It states that any 16-18 year old who commits a heinous offence may be tried as an adult. The JJB shall assess the child’s mental and physical capacity, ability to understand consequences of the offence, etc. On the basis of
this assessment, a Children’s Court will determine whether the child is fit to be tried as an adult. What did the Standing Committee examining the Bill observe? One of the reasons cited for the introduction of the Bill is a spike in juvenile crime, as depicted by NCRB data. The Standing Committee on Human Resource Development examining the Bill stated that NCRB data was misleading as it was based on FIRs and not actual convictions. It also observed that the Bill violates some constitutional provisions and said that the approach towards juvenile offenders should be reformative and rehabilitative. The Bill as introduced posed certain constitutional violations to Article 14, 20(1) and 21. These have been addressed by deletion of the relevant clause, at the time of passing the Bill in Lok Sabha. What does the United Nations Convention on the Rights of the Child (UNCRC) say? What are the obligations on the signatory nations? The UNCRC was ratified by India in 1992 and the 2000 Act was consequently brought in to adhere to the standards set by the Convention. The proposed Bill maintains this aim and seeks to improve implementation and procedural delays experienced by the 2000 Act. The UNCRC states that signatory countries should treat every child under the age of 18 years in the same manner and not try them as adults. While the 2000 Act complies with this requirement, the Bill does not. However, many other countries who have also ratified the Convention try juveniles as adults, in case of certain crimes. These countries include the UK, France, Germany, etc. The United States is not a signatory to the UNCRC and also treats juveniles as adults in case of certain crimes. Under the Bill, what happens to a child who is found to be orphaned, abandoned or surrendered? The Bill addresses children in need of care and protection. When a child is found to be orphaned, abandoned or surrendered he is brought before a Child Welfare Committee within 24 hours. A social investigation report is conducted for the child, and the Committee decides to either send the child to a children’s home or any other facility it deems fit, or to declare the child to be free for adoption or foster care. The Bill outlines the eligibility criteria for prospective parents. It also details procedures for adoption, and introduces a provision for inter-country adoption, so that prospective parents living outside the country can adopt a child in India. Currently, the Guidelines Governing Adoption, 2015 under the 2000 Act, regulates adoptions. Model Foster Care Guidelines have also recently been released by the Ministry of Women and Child Development. What are the penalties for committing offences against children? Various penalties for committing offences against children are laid out in the Bill. These include penalties for giving a child an intoxicating substance, selling or buying the child, cruelty against a child, etc. Issue to consider: The penalty for giving a child an intoxicating or narcotic substance is an imprisonment of seven years and a fine of up to one lakh rupees. Comparatively, buying or selling a child will attract a penalty including imprisonment of five years and a fine of one lakh rupees. It remains to be seen if the Bill will be taken up for consideration in this session, and if its passage will address the issues surrounding children in conflict with the law.
