[Mission 2022] QUIZ – 2022: INSIGHTS STATIC QUIZ, 31 March 2022 – Economy

Solution: b)

How can MSP be made legally binding?

There are two ways it can be done.

The first is to force private buyers to pay it. In this case, no crop can be purchased below the MSP, which would also act as the floor price for bidding in mandi auctions. 

The second route is, of course, the government itself buying the entire crop that farmers offer at the MSP.

Commercial crops like cotton, copra and raw jute are covered under MSP.

Solution: b)

One of the reasons for agrarian distress is the declining average size of farm holdings. The average farm size declined from 2.3 hectares (ha) in 1970-71 to 1.08 ha in 2015-16. The share of small and marginal farmers increased from 70 per cent in 1980-81 to 86 per cent in 2015-16. 

In the last decade, the Centre has encouraged farmer producer organisations (FPOs) to help farmers. Since 2011, it has intensively promoted FPOs under the Small Farmers’ Agri-Business Consortium (SFAC), NABARD, state governments and NGOs.

Solution: c)

In agriculture Census, the operational holdings are categorised in five size classes as follows:

Marginal: Below 1.00 hectare.

Small: 1.00-2.00 hectare.

Semi- Medium: 2.00-4.00 hectare.

Medium: 4.00-10.00 hectare.

Large: 10.00 hectare and above.

Solution: b)

National Agriculture Market (eNAM) is a pan-India electronic trading portal which networks the existing APMC mandis to create a unified national market for agricultural commodities.

It was launched by the Ministry of Agriculture, Government of India. The electronic market pilot across India was launched on 14 April 2016 by Prime Minister of India, Narendra Modi.

Small Farmers Agribusiness Consortium (SFAC) is the lead agency for implementing eNAM under the aegis of Ministry of Agriculture and Farmers’ Welfare, Government of India.

Solution: a)

• For the first time, in 1966-67, the minimum support price (MSP) of wheat and paddy was fixed. To fix the price, the central government constituted the Agricultural Prices Commission, which was later renamed as the Commission for Agricultural Costs and Prices (CACP) in 1985.

• The MSP of a crop is the same throughout the country.
• The Food Corporation of India (FCI) was constituted in 1965 on the recommendation of the LK Jha Committee. The government stores the grains procured from the farmers with the FCI and NAFED (National Agricultural Cooperative Marketing Federation of India) from where the grains are distributed to the poor under the Public Distribution System (PDS).
• Since 2009, the Commission for Agricultural Costs and Prices fixes the minimum support price of a crop based on cost, demand, supply position, price changes, market price trend, different costs and international market prices.
• The Ministry of Agriculture also claims that the cost of production of cultivation does not only include cash expenditure (as per market) but also the cost of labour (as per market rate). This means that agricultural wage rate is also considered while setting up of the MSP.