'Higher MSP Will Not Distort Market Prices'

The NDA regime has announced a steep increase in minimum support price for 14 kharif crops. The question is, will this mitigate the mounting rural distress? Union Agriculture Minister Radha Mohan Singh walks Business Today through his blueprint for increased procurement and distribution.

The augmentation of infrastructure required for procuring, storing and distributing crops acquired with the increased MSP will be an uphill climb. How will you translate plans to implementation?

A: Our target is broad-based commodity procurement to ensure farmers in all states are covered. We are firming up the procurement mechanism to define protocols and designated agencies.

The Food Corporation of India, and other designated state agencies, will continue to procure paddy and wheat at MSP from farmers while other agencies such as NAFED, FCI, and SFAC will continue procuring pulses and oil seed. The Cotton Corporation of India will serve as the central nodal agency for cotton price support operations but will be supplemented by NAFED. We (the government) will fully reimburse any losses these agencies incur.

How prepared are states for the increased purchase requirements that follow the MSP increase? What role does the Price Support Scheme (PSS) play there?

A: The NITI Aayog is working with states to come up with a more robust procurement mechanism. We would like to make the state government more responsible so that the response is immediate when prices in the market fall.