Government hikes raw jute MSP Rs 300 to Rs 5,050 per quintal

Tags: Economy/Finance National News

Cabinet Committee on Economic Affairs (CCEA) on 24 March increased the minimum support price (MSP) of raw jute by Rs 300 to Rs 5,050 per quintal for 2023-24 season.

An overview of the news

• The approval is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).

• The MSP of Raw Jute (TD-3 equivalent to earlier TD-5 grade) has been fixed at Rs 5,050 per quintal for 2023-24 season.

• The announced MSP for raw jute for the 2023-24 season is in line with the principle of fixing the MSP at a level of at least 1.5 times the all-India weighted average cost of production announced by the Government in the Budget for 2018-19.

• It assures a minimum of 50 per cent as profit margin.

• This is one of the important and progressive steps towards ensuring better remunerative returns to the jute growers and promoting quality jute fibre.

• The Jute Corporation of India shall continue as the nodal agency of the Central Government to conduct price support operations and the loss, if any, incurred in such operations shall be fully reimbursed by the Central Government.

What is Minimum Support Price (MSP)?

• MSP is the rate at which the government buys food grains from farmers.

• This is based on the calculation of at least one and a half times the cost of production incurred by the farmers.

• The Government of India fixes the MSP for 24 items twice a year.

• When the market price falls below the declared MSP, the government buys food grains from the farmers at the MSP rate.

Who decides MSP? 

• The MSP price is calculated by an expert committee under the ministry of Agriculture. 

• The expert committee is called CACP (Commission for Agricultural Costs and Price). 

• It recommends the MSP to the Agricultural ministry and the ministry announces the MSP. 

• However the Agricultural Ministry is not bound to accept the recommendation of the CACP.