Consider the following statements with respect to the Farmer’s Demand to Legalise MSP?

Consider the following statements with respect to the Farmer’s Demand to Legalise MSP?

1. The Central Government sets a minimum support price (MSP) for 23 crops every year, based on a formula of one-and-a-half times production costs.

2. This takes into account both paid-out costs (A2) such as seeds, fertilizers, pesticides, fuel, irrigation, hired workers and leased-in land, as well as the imputed value of unpaid family labour (FL).

Which of the following statements is/are correct?

A. 1 Only

B. 2 Only

C. Both A & B

D. None of these

Answer: Both A & B

Explanation:

Despite Prime Minister Narendra Modi’s announcement accepting the protesting farmers’ key demand – repeal of the three farm laws – farmers’ unions have said their protest will continue until their six remaining demands, including the legal mandate for minimum support prices (MSP), are met.

The Central Government sets a minimum support price (MSP) for 23 crops every year, based on a formula of one-and-a-half times production costs.

This takes into account both paid-out costs (A2) such as seeds, fertilizers, pesticides, fuel, irrigation, hired workers and leased-in land, as well as the imputed value of unpaid family labour (FL).

Farm unions are demanding that a comprehensive cost calculation (C2) must also include capital assets and the rentals and interest forgone on owned land as recommended by the National Commission for Farmers.

There is currently no statutory backing for these prices, nor any law mandating their enforcement. The government only procures about a third of wheat and rice crops at MSP rates (of which half is bought in Punjab and Haryana alone), and 10%-20% of select pulses and oilseeds.

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