TAG: GS 3: ECONOMY, AGRICULTURE
THE CONTEXT: The Cabinet Committee on Economic Affairs (CCEA) has approved a significant increase in the Minimum Support Price (MSP) for copra for the 2024 season.
EXPLANATION:
- This decision aims to support coconut growers by offering higher remunerative returns and encouraging the expansion of copra production.
- The new MSP for milling copra has been raised to ₹11,160 per quintal, marking a ₹300 per quintal increase from the previous year.
- Ball copra’s new MSP stands at ₹12,000 per quintal, showing a hike of ₹250 per quintal from the previous year.
- These revised rates will be effective from the upcoming year.
Government’s Rationale for the MSP Increase
- Union Minister for Information and Broadcasting highlighted that despite global declines in copra prices, the government is committed to ensuring an MSP at least 50% higher than the production cost.
- This move represents an effort to support coconut farmers amidst challenging market conditions.
Margin Ensured by the New Rates
- The government’s release indicates that the new MSP rates guarantee a margin of 51.84% for milling copra and 63.26% for ball copra.
- Milling copra, utilized for oil extraction, is majorly produced in Kerala and Tamil Nadu, while Karnataka is a significant producer of ball copra, consumed as a dry fruit and for religious purposes.
MSP Growth Over the Years
- The government highlighted the significant increase in MSP over the past decade.
- The MSP for both milling and ball copra has risen from ₹5,250 and ₹5,500 per quintal in 2014-15 to ₹11,160 and ₹12,000 per quintal in 2024-25, respectively, indicating a growth of 113% and 118%.
Impact and Benefits
- The government emphasized that the heightened MSP will not only benefit coconut growers by providing better returns but will also incentivize farmers to expand copra production.
- This expansion aims to meet the rising demand for coconut products both domestically and internationally.
Procurement Details and Agencies Involved
- In 2023, the government procured over 1.33 lakh metric tonnes of copra, amounting to ₹1,493 crore, benefiting approximately 90,000 farmers.
- This procurement reflects a significant 227% increase compared to the previous season (2022).
- The National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National Cooperative Consumers’ Federation (NCCF) will continue to act as Central Nodal Agencies (CNAs) for copra and de-husked coconut procurement under the Price Support Scheme (PSS).
- It is being implemented by the Government of India in the state.
- It is one of the components of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (AASA) scheme.
- The Department of Agriculture & Cooperation implements this scheme for procurement of oil seeds, pulses and cotton, through NAFED which is the Central nodal agency, at the MSP declared by the government.
- Bajra, Jowar, Maize, Paddy, Cotton, Tur, Moong, Urad, Groundnut, Sesamum Wheat, Gram, Mustard, Sugarcane etc. are the major crops covered.
- Farmers get the benefit of the scheme through the sale of their produce at support price in APMC centres opened by the Nodal procurement agency.
- When prices of commodities fall below the MSP, State and central notified procurement nodal agencies purchase commodities directly from the farmers at MSP, Under specified FAQ (fair Average Quality).
Conclusion:
- Supportive Measures for Coconut Growers The government’s decision to increase the MSP for copra signifies its commitment to bolstering the livelihoods of coconut farmers.
- By ensuring better returns and stimulating increased copra production, the move aims to strengthen the coconut industry, meeting both domestic and global demand for coconut-based products.
