Minimum Support Price Research Articles

Assessment of Productivity and Monetary Losses Due to Water Erosion in Rainfed Crops Across Different States of India for Prioritization and Conservation Planning

Estimated annual production losses from rainfed cereal, oilseed and pulse crops at state, zonal and national levels do not provide a comparative picture of the severity of losses in different areas and crops leading to decline in production on per-unit area basis. In this paper, productivity or per-unit area production losses have been estimated for the considered rainfed crops to identify the states/regions in the country where intensive conservation measures need to be adopted to bring erosion within permissible limits and to restore the productivity of these crops to their potential capacity. Further, productivity losses were valued at government minimum support prices of the study crops to compute the monetary losses in the major cereal, oilseed and pulse crops in the country. It was observed that productivity loss in rainfed cereals at state level ranges from 0.2–10.9 q/ha, for oilseeds 0.1–6.3 q/ha and for pulses 0.04–4.4 q/ha. These losses in the states having relatively smaller areas under these crops and are low ranked in terms of total production loss, such as northeastern states, Goa, Kerala and Uttarakhand, are 2–5 times higher than the national average and are placed in top 8–10 ranks of affected states, thus justifying the need to estimate productivity losses rather than the production losses. The northeastern states, though account for only 4 % of rainfed area under considered crops, are the leading states in terms of productivity losses. India as a whole suffers a loss of 1.63 q/ha in productivity of rainfed crops, which is valued at Rs. 2,484/ha. In absolute terms, the annual production losses are 13.4 Mt valued at Rs. 205.32 billion considering minimum support price of 2011/12. About 53 % of total monetary loss is accounted for by paddy, groundnut, soybean and maize crops due to water erosion.

Comparative Profitability of Onions Harvested as Green and Dry (Mature) in Botswana

This study was an attempt to calculate and compare the profitability of onions harvested as green and dry (mature) in Botswana. Half of the planted onions were harvested and sold as green and half were harvested and sold as dry onions. The cost of production of green onions was 32.78% higher than the cost of production of dry onions. The irrigation and marketing expenses contributed the highest difference in the cost of production of green and dry onions. The major cost item contributing to the cost of green onions production was marketing cost (32.86%) followed by irrigation cost (23.77%) and harvesting cost (18.53%) whereas the highest cost of production for dry onions was contributed by irrigation (38.58%) followed by marketing (19.45%) and planting (11.96%). The marketing cost for green onions was almost double (35.6%) as compare to the dry onions (18.2%). The total return from green onions was 50.90% higher than the returns from dry onions. Gross margin of onions harvested as green was 63% higher than the gross margin from dry onions, which indicated that the production of green onions is more profitable as compare to production of dry onions. The farmers preferred onion harvested as green because it generates regular and higher returns than onions harvested as mature. Government should support farmers through some policies such as Minimum Support Price (MSP) for dry onions, distribution of Mini Ferti–Seed Kit (Seeds of improved varieties and fertilizer package), construction of storages and formation of cooperatives. Int. J. Agril. Res. Innov. & Tech. 3 (1): 73-77, June, 2013 DOI: http://dx.doi.org/10.3329/ijarit.v3i1.16096

Dendrobiomass Based Power Generation - A PCS (Production to Consumption System) Approach in Tamil Nadu, India

Bioresources particularly the dendro energy resources play significant role in meeting the energy requirement of both domestic and industrial requirements. With the improvement in the technology of conversion and utilization over the last three decades dendro energy resources have reached a status of being considered as commercial energy resources and are prioritized for use in decentralized biomass based power generation projects. However, many biomass based power plants started in the country in general and the state of Tamil Nadu in particular have exhibited various constraints which resulted in uncertained power generation. The reasons are numerous but the key factors are non-availability of quality (High Calorific Value) raw material, fragmented land use pattern, lack of site specific HDSR models, unorganized supply chain and lack of partnership among various stake holders. Against this back drop, the current project has conceived a concept of consortium mode dendro energy farming by comprehensively involving all levels of stake holders viz., research institutes for technology development for dendro energy resources, biomass power plant for assuring minimum support price and to facilitate contract farming, the farmers to grow energy trees identified by the research institutes and adopt precision silvicultural technology and lastly the financial institution to provide credit facilities to energy plantation growers. This consortium has been successfully introduced and implemented in Tamil Nadu in association with Auromira Energy Company Limited which have three Biomass Power Plants with an installed capacity of 35.5 MW. Through this consortium, the research institute has identified high yielding energy rich species and developed HDSR models suitable for varied agroclimatic zones. This consortium has introduced contract dendro energy farming in the state following farm forestry and captive model approaches. The various contract farming models land lease, tree share and income share models have been introduced through this consortium to benefit the growers and the biomass based power plants. In a holistic perspective the consortium has reduced the impact of multipartite supply chain in to a bi-partite, tri-partite and quad partite model supply chain thereby helped to augment the Production to Consumption System (PCS). This model can suitably be modified to meet the wood requirement of other wood based industries. This paper discusses the constraints and the interventions made to augment dendrobioresources to generate power which are from clean and green bioresources.

Farm Size, Cropping Pattern and Productivity Variation in Punjab: The Analysis of Mansa and Jalandhar Districts

The present paper analyzes the trend and patterns of farm size, productivity and cropping pattern in districts of Mansa and Jalandhar. The results show that medium and large holdings are increasing in number over the time in both the districts. Increase in size of holdings coupled with other factors like increase in productivity in limited number of crops, minimum support price for wheat and rice as well as higher possibility of use of modern technology in wheat and rice cultivation has lead to wheat rice cycle. The other crops like cotton, maize, potato etc. are more popular among marginal and small farmers. It may be due to easy availability of family labour. Overall, the study points towards specialization in the cropping pattern, stagnation in productivity growth and increasing size of operational holdings.

Agri-Tourism: An Innovative Supplementary Income-Generating Activity in Rural India

Global economic restructuring has created a climate in which many local economies have to adjust in order to maintain or enhance their socioeconomic viability. As Butler et al. (1998) note economic and social forces operating at the global level are determining both the nature and form of rural landscapes and how we value and use it. India is also in the process of such restructuring and planning for socioeconomic development in all fronts. Today, the Indian agriculture is facing tremendous competition because of driven global trends. To add to this, the agriculture crop growth is also weakened due to uncertain climatic conditions. Moreover, there is no minimum support price guarantee. These changes have altered the form and practices of farming operation. Farmers are looking beyond traditional farming to generate income via various forms of direct on farm marketing and farm-based non-agriculture business (Gopal et al., 2008). Many Indian farmers are currently involved in or are considering the use of agri-tourism as a means of diversifying their farm operations. How they will accomplish this is the challenge. The full growth potential for agri-tourism can only be achieved if strategies to address their challenges are developed and implemented. This study aims to explore the concept of agri-tourism. The key issues involved in the development of agri-tourism have been discussed through a case-study of an agri-tourism destination.

Can FDI in Retail Change the Life of Farmers? A Case of North India

Agriculture sector is very important for any economy in terms of the economic growth and development of the country, but some time agriculture sectors backwardness also may become a cause of underdevelopment of the country. Like in India agriculture sector is one of the most suffering sectors of the economy. In India near about 50.2 per cent of population is depends on agriculture (census report; NSSO survey report). The aim of this paper is to find out the effects of FDI in retail sector on the agriculture in India. The study will also investigate the effect of FDI on the income of the farmers. The study shows that in a existing north Indian agriculture system there is a problem of two crop cycle and the people are mainly want to produce the only those crops which has a minimum support price like in north India the people only emphasis on a wheat and paddy because the central government fixed a MSP for these crops.

Handbook on rice policy for Asia

Agricultural policies in Asia are historically pervasive, especially those pertaining to rice—a staple for half of the global population and a source of livelihood for nearly a billion people. Because of its strategic and political importance, the rice sector has been subject to a number of policy interventions. The objective of this handbook is to explain the current policy structure in the major rice-producing and rice-consuming countries in Asia. Many Asian countries have revamped their efforts in recent years to achieve rice self-sufficiency and stabilize domestic prices through stronger policy interventions. To insulate the domestic market from global uncertainty, a majority of Asian countries control the movement of rice in and out of the country through a variety of trade measures, including state trading and quantitative trade restrictions. A few rice-exporting countries set minimum export prices to ensure availability of rice for their domestic consumers by controlling exports and in some cases countries even temporarily banned rice exports. On the domestic front, many large rice-growing countries have increased the minimum support price for farmers and introduced many short-term policy measures to subsidize inputs such as fertilizer, seed, electricity, and fuel to expand domestic rice production. Net rice-importing countries, on the other hand, besides implementing policies to enhance domestic production by providing incentives to farmers, also provide a price subsidy on rice to make it affordable to poorer consumers. Governments often adopt highly crafted programs designed to raise the income of farmers by enhancing rice production. This includes the use of price floors, subsidized loans, payments to encourage fallow area, etc. The policies related to production, consumption, and stock of rice can be broadly categorized as domestic policies since any change in these policies mainly affects the behavior of local producers or consumers. In this handbook, rice policies pursued by the major rice-producing and rice-consuming countries in Asia are compiled. This handbook clearly demonstrates that a number of major rice-exporting countries adopted some measures to create a buffer domestic rice market, such as imposing an export ban for a short period and setting minimum export prices to ensure an available rice supply in the domestic market (India and Vietnam). In contrast, major rice-importing countries lifted the tariff on imported rice without giving any special treatment to domestic producers to ensure an available rice supply in the domestic market (Nepal and Bangladesh).

Impact of MSP on Area Under Cultivation and Level of Production: A Study of Selected Crops in India

This article focused on Minimum Support Price (MSP) policy and it impact on important crops in India. In this study tested the hypothesis of “MSP has positively affects and correlates with area under cultivation and production of those crops” after examination of this hypothesis. It is found that, this hypothesis is not matching set to production of each crops and their area under cultivation. While the study concludes that, MSP is not affecting positively on agricultural production.

Trends in Production and Comparison of Cost of Production and Minimum Support Price of Coarse Cereals

In the rainfed regions of the country coarse cereals form the staple diet of the majority of the poor. Keeping in view of the importance of coarse cereals, this study estimates the Compound Growth Rate (CGR) of area, production and productivity of major coarse cereals and analyzes the trends in cost of production of coarse cereals and the Minimum Support Price (MSP) announced by the Government. The study is based on time series data on area, production and productivity of coarse cereals (bajra, maize, ragi, jowar) from 1970-71 to 2007 - 08. The 38 years data were classified at decadal intervals and the decadal trends in area, production and productivity were analyzed through CGR. The data on cost of cultivation and MSP were collected from the reports of Commission on Agriculture Costs and Prices, Government of India and compared. The difference between MSP and cost of production was highest in ragi followed by cumbu, maize and Jowar.

Capacity Utilization in Nepalese Sugar Industry

Under utilization of production capacity is a common issue for Nepalese manufacturing enterprises and sugar industry is no exception to this. This study mainly deals with the cause of underutilization of production capacity of Nepalese sugar mills as well as the market situation of sugar and sugarcane. Inspite of sufficient production of sugarcane, the sugar mills do not get adequate quantity and proper quality of sugarcane at right time. Almost half of the sugarcane production has no market which reveals the poor procurement system. The approved production capacity of Nepalese sugar mills is more than domestic requirement of sugar. However, the unfulfilled demand for sugar is fulfilled mainly by imported as well as smuggled Indian sugar. The capacity utilization rate of Nepalese sugar industry, which has been decreasing, dropped to 45percent in FY 2008/09. The main identified reasons are stoppage, breakdown and slow motion of machines, delay in settlement of minimum support price of sugarcane and late commencement of production season, political instability, less operation days of sugar mills and ultimately the overlook of sugar producers to utilize their full capacity of production. Measures to improve the capacity utilization rate of sugar mills have become an urgent need.

Pricing model for biodiesel feedstock: A case study of Chhattisgarh in India

Following the global trend, India declared its biofuel policy in which biodiesel, primarily from jatropha, would meet 20% of the diesel demand beginning with 2011–2012. To promote biofuel, Indian government has announced biodiesel purchase price as well as compulsory blending ratio. But, these measures have not worked to create large scale biodiesel production in India. With this backdrop, this paper highlights about the importance of a sound pricing policy focusing on the entire value chain of biodiesel production. The analysis is based on field level data from Chhattisgarh, the leading state in the production of jatropha. Such a sound pricing policy has to deal with the prices of feedstock, by-products and final product like biodiesel. It would also have to reflect on the business model of production of biodiesel. The simulation exercises in our model shows that the business returns from the production of biodiesel and the minimum support price (MSP) of the feedstock for biodiesel (i.e. jatropha seeds in this case) are sensitive to various parameters like seed yields, technological efficiency, by product and petro-diesel prices. An effective price policy framework has to consider all these factors to create a platform for sustainable biodiesel production in India.

Market liberalization and crop planting decision: a case of China

PurposeThe paper aims to measure the effects of market liberalization on Chinese farmers' crop planting decisions.Design/methodology/approachThe effects are measured using a censored, two‐stage, least‐square regression.FindingsThe results show that the effects of market liberalization on planting decisions are more significant in the case of crops with minimum support price (rice, wheat, and corn) than in the case of crops where planting decision is determined by market prices (cotton and soybean). The effects appear to be different across regions and time zones and more significant in 1993 than in 2005.Originality/valueThe result suggests that market liberalization along the past ten years achieved significant effects in Chinese farmers planting decision. This outcome should be taken into consideration when evaluating and implementing future Chinese agricultural policy income‐based interventions as a means to meet domestic food security goals and increase farmers' income level.

Buyer Collusion and Efficiency of Government Intervention in Wheat Markets in Northern India: An Asymmetric Structural Auctions Analysis

This paper uses auction theory to analyze wholesale markets for wheat in Northern India. This approach enables us not only to characterize the market in terms of buyer asymmetries, but also to detect the existence of collusion and to quantify its impact on market prices. We show that buyer asymmetries exacerbate the downward impact of collusion on prices. The paper also demonstrates the use of auction theory to analyze questions of government efficiency. It considers whether the government paid too much for the wheat it procured at the minimum support price, and shows that for our sample it did not. The paper is based on a primary survey of two wholesale markets in North India.

Credit Constraints and Distress Sales in Rural India: Evidence from Kalahandi District, Orissa

The literature on the rural credit market in India (and elsewhere) has generally assumed that peasant farm households are rationed in their access to subsidized formal credit. Because of a lack of infrastructure and poor access to institutional credit, such farmers are exploited by means of an interlocked market connecting informal credit to the sale of paddy. The resulting gap, between the sale by a borrower of paddy at a predetermined low price, and the price of this commodity on the open market, constitutes the amount of what is termed a distress sale. The latter is itself influenced by the bargaining capacity (or lack thereof) of the peasant farmer who borrows on the informal market. Also of importance in determining whether or not a cultivator is compelled to resort to the informal credit market – and thus into an interlocked arrangement – is the need for additional liquidity to meet production costs and/or household consumption, as well as the monopsony nature of the paddy market. Data from Kalahandi district in Orissa suggest that access to formal credit is limited in rural areas although there exists a high demand for it, that a high degree of credit rationing by the formal lender occurs, and that poor implementation by the state of minimum support price policy all contribute to the need for informal loans and its attendant interlinkage.

Mean spillover effects in agricultural prices: Evidence from changes in policy regimes

This paper investigates the behavior of input, output, and consumer food prices under two different policy regime periods, before and after the reformulation of the Common Agricultural Policy (CAP) occurred in May 1992. The findings, through Granger causality tests, support a different behavior in terms of the transmission from the input level to the consumer level and vice versa. This transmission occurs through the output level only for the post-CAP reformulation period, while it occurs in a direct manner over the first period. The results imply that the decrease of agricultural output prices, due to lower minimum support prices following the reformulation of the CAP, is transmitted through the output price mechanism in both input and consumer food markets.

Cereals market liberalization in Mali

This paper analyzes the impact of the process of liberalization of cereal markets in Mali. Most consumers, including food-deficient farmers, and private grain traders have benefited from the liberalization. Efforts to tie the liberalization to a minimum support price for farmers failed because the state lacked the resources to guarantee the support price. Furthermore, the ability of different types of farmers and traders to respond to opportunities created by the liberalization has varied widely, depending on their access to productive resources, improved technologies, information, and credit. Economy-wide constraints, such as the insecurity of contracts and liquidity constraints resulting from the failure of the government to pay salaries on time, have further limited the impact of the liberalization.

Scope for Exploitation of Consumers Through Speculation: A Dynamic- Programming Approach to the Case of the Indian Sugar Industry

The Government of India (G.O.I.) controls the quantity of sugar released into the domestic market on a monthly basis. This forms a part of the package of public policies affecting the development of the Indian sugar industry, which includes protection from foreign competition, simultaneous existence of an open market for sugar and distribution of sugar at subsidized prices to consumers through the public distribution system (P.D.S.), minimum support prices for the farmers producing sugar-cane, and differential prices paid to sugar factories for the sugar taken over by G.O.I. for the P.D.S.Using a dynamic-programming approach, this paper describes a worst case analysis of the scope for the traders to exploit the consumers under the current policy of controls over releases into the domestic market. The results show the marginal importance of such controls in saving the consumers from the exploitation by traders. Secondly, on the basis of wider research done by the authors, it is concluded that the scope provided to the traders for the exploitation of consumers through the other policies of the package is of such a magnitude as to make the controls over the releases into the market a relatively insignificant policy intervention for protecting the consumers.

Minimum Support Prices for Foodgrains:Guidelines for a Policy and a Programme

The demand for a minimum support price for foodgrains comes from the producers of foodgrains. Naturally, in the minds of many, the demand for and the concept of minimum support price are closely associated with the notion of 'cost of production' of foodgrains. One of the reasons, possibly a minor one, for the failure to evolve a public policy and a programme in this field in the past has been the difficulty of knowing what the 'cost of production' meant in this context and an imperfect understanding of how it might be related, in concept and in operation, to a minimum support price.