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In this essay we will discuss about Agricultural Price Policy in India. After reading this essay you will learn about: Need of Agricultural Price Policy 3. Agricultural price policy in India was introduced since independence.
But the agricultural price policy formulated in India has varied widely for different years and also for different crops. This policy put much emphasis on the prices of foodgrains like wheat, rice and coarse cereals such as jowar, bajra, maize etc.
In India, the price policy was first introduced in with the formation of Food grains Policy Committee which recommended a policy of progressive decontrol, reduction of imports or food grains and substantial increase in the production of foodgrains.
Again inFoodgrains Procurement Committee was appointed which introduced the system of rationing and control in the supply of foodgrains in the country. The main objective of the price policy in India was to protect the interests of consumers. In this policy no attention was paid to provide incentive price to farmers.
It was only ina clear-cut policy was introduced for providing incentive price to farmers.
The farmer, in other words, should be assured that the prices of foodgrains and the commodities that he produces will not be allowed to fall below reasonable minimum. This committee recommended various measures such as: Again as per the recommendation of this committee, the Agricultural Price Commission was set up in Inthe government appointed another foodgrains Policy Committee which recommended the following matter in connection with the prices of agricultural commodities: Moreover, inthe Food Corporation of India FCI was set up for making necessary procurement, storage and distribution of foodgrains.
Intotal capital employed in FCI was to the extent of Rs 5, crore with its total storage capacity at 18 million tonnes. The Fifth Plan also formulated the agricultural price policy in order to meet two important considerations, i. In order to build up buffer stocks, various public sector organisations would announce purchase prices at different times which would be higher than minimum support prices.
Secondly, price policy is an important tool for facilitating crop planning, an aspect which so far has not received adequate attention in the country. Finally, price policy can be geared towards community are not eroded by continuing unfavourable terms of trade between the agricultural sector and non-agricultural sector.
The Seventh Plan realised the importance of rationally determined support prices for wheat and rice in reducing price fluctuations, raising profitability and stimulating growth of output. The Plan argued to introduce such systems for coarse grains, pulses and oilseeds and also agreed to determine the appropriate relative prices of different types of crops in order to make provision for efficient use of resources in the country.
At present, the government decides on the MSPs for various agricultural commodities taking into account the recommendations of the Commission for Agricultural Costs and Prices CACPthe views of state governments and central ministries as well as such other relevant factors which are considered important for fixation of support prices for agricultural commodities.
Inthe MSPs for various agricultural crops have already been increased. In the mean time, the MSPs of some major crops exhibit a rising trend in line with costs and as incentive for higher output. Need of Agricultural Price Policy: Movement of price is a common feature.
But rapid and violent movement or fluctuations in the prices of agricultural commodities have serious consequences on the economy of the country.
As the sudden steep fall in the price of a particular crop, result in huge loss to the farmers producing that crop as their income declines. This will force the farmers not to cultivate the crop next year leading to a serious shortage in the supply of that food item and that may force the government to import that food crop from foreign countries.
Alternatively, a sudden hike in the price of a particular crop may cause huge suffering to the consumers which may force the consumers to discard it or to curtail their other expenditure substantially for meeting the consumption expenditure on that crop.ADVERTISEMENTS: In this essay we will discuss about Agricultural Price Policy in India.
After reading this essay you will learn about: 1. Subject Matter of Agricultural Price Policy in India 2. Need of Agricultural Price Policy 3. Objectives 4. Measures 5. Evaluation 6.
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