What is the Indian Agricultural Price Policy?

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1. Guest8836
   

    The main aims of the India’s government's price policy for agricultural produce, is to ensure remunerative prices to the growers for their produce with a view to motivate higher investment and production. Towards the end, minimum support prices for important agricultural products are announced each year which are fixed after taking into account, the suggestions of the Commission for Agricultural Costs and Prices (CACP). The CACP while establishing prices takes few factors into account, few of them are given below:
   
   • Cost of Production
   
   • Changes in Input Prices
   
   • Input/output Price Parity
   
   • Trends in Market Prices
   
   • Inter-crop Price Parity
   
   • Demand and Supply Situation
   
   • Effect on Industrial Cost Structure
   
   • Effect on General Price Level
   
   • Effect on Cost of Living
   
   • International Market Price Situation
   
   • Parity between Prices Paid and Prices Received by farmers in term of trade  
   
   From above mentioned factors, cost of production is one of the most tangible issues and it takes into account all operational and fixed demands. Government made Price Support Scheme (PSS) of the commodities, through several public and cooperative agencies such as FCI, CCI, JCI, NAFED, Tobacco Board, etc are those for which the MSPs are already defined. For products not fall under PSS, Government also arranges for market intervention on special request from the States for specific quantity at a mutually decided price.

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