Discuss the recommendations of Ramesh Chand Committee Report of March 2015 with respect to the Minimum Support Price (MSP). Why the government is reluctant to accept these recommendations?

Ramesh Chand committee was set in 2013, to examine the methodological issues in the fixing of MSPs. The committee submitted its report in 2015. Some of the important recommendations of Ramesh Chand committee are:

  • The committee recommended that Commission for Agricultural costs and prices which is now restricted to computing MSPs shall act as a policy body for agricultural sector and it can be renamed “Commission on Agricultural Costs, Prices and Policies”
  • One of the long standing complaint of farmers is MSPs do not cover the costs of cultivation. The committee suggested inclusion of post-harvest costs, calculating rental value of land at existing prices and interest costs on actual basis, to ensure remunerative prices.
  • Presently, MSP is announced for 24 crops but purchase of only six actually takes place. The committee recommended a “deficiency price payment” mechanism for crops for which an MSP is declared but purchase doesn’t materialize. In such a situation, the committee recommends, the government could compensate farmers for the difference between the MSP and (lower) market price.

While calculating the cost of production, two villages should be selected in place of one village from each block.


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