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Minimum Support Price (MSP) and its role

MSP of jute, along with other 24 commodities, is fixed by the Government of India on the basis of recommendations of Commission for Agricultural Cost and Prices (CACP). It aims at protecting cultivators, particularly small and marginal farmers, from exploitation by middle men. In the case of jute, JCI ensures stability of  raw jute prices in the market. The JCI is obliged to buy whatever quantity of jute is offered by cultivators at MSP without any limit. This year the MSP for jute has been decided at ` 3500 per quintal for an average quality of jute known as TD 5. Is it sufficient for cultivators?

The cultivators are demanding a higher price as MSP. The Paschimbanga Krishak Samiti spokesperson told BE that the total cost of jute cultivation per bigha costs about ` 12,000. A bigha of land produces a little over 3 quintals of jute. Therefore, the MSP for average jute should be at least ` 4000 per quintal. The cultivators cannot continue cultivating jute unless their cost of production is covered. But the government view is different. Dr. K.V.R. Murthy, Chairman and Managing Director, JCI, told BE that almost none of the cultivators are satisfied with the MSP although it is decided by the CACP in a very logical manner with the help of experts. He also said that the MSP is decided so scientifically that the cultivators cannot prove it wrong. If any cultivator’s cost of production is above the MSP he should think of the loopholes in his method of cultivation. There are other areas of concern as well.

Quality of jute

India faces the challenge of producing quality jute. It has to improve its quality jute, that is, lengthier, better coloured and better fibred jute. After independence, the jute industry has been facing quality crisis. Bangladesh produces high quality jute but most of the jute industry remains on the bank of the river Bhagirathi or Hooghly. In this situation, the JCI  has recently taken several steps to increase the productivity and quality of jute. Supply of subsidised high quality jute seed to cultivators, training to cultivate in the modern method to increase productivity and shortening cultivation time period, improved retting practices, etc. are some of the steps adopted by the JCI. The JCI sources said that through its I-CARE Scheme for 2017-18 it has covered 100372 farmers and 70328 hectares land for adopting better methods cultivation. In the coming phase, the JCI expects to enhance coverage by 50% in the case of farmers and 56% in the case of acreage within 2018.

Another area is the purchasing of jute. The JCI is bound to purchase any amount of jute at MSP. But the jute should fulfill the condition that the lot should be storage-worthy. One of the most important factors is the moisture content of jute. This is why the JCI will not purchase any jute whose moisture content is more than 18%. This can be verified with the help of the moisture meter.

Conclusion

The JCI has been maintaining price stability in the jute market through introduction of the MSP. That is why the farmers are getting a more or less satisfactory price of jute. Members of the JCI Employees Union think that farmers’ agitation for a higher price of jute is mounted either by political organisations or by agents of the jute traders and not actually to address farmers’ own demand. It is because the prices set by CACP are done through a well thought out method.

The purchasing operational centres under direct control of JCI or JCI controlled cooperative centres or private agencies should have a vital role in making the purchase process transparent. JCI should always take care of that.