Subsidies

Question 1

Agreement on Agriculture

Answer 1

born out of Uruguay round, to establish fair and market oriented agricultural system

Question 2

Green box measures WTO

Answer 2

Those which do not distort market supply demand, not subject to reduction committments . Eg. stimulus to agri research and tech. Those which distort trade minimally- decoupled payments (do not influence production)

Question 3

Amber box measures WTO

Answer 3

those which distort market and trade. eg MSP, fertilizer, seed subsidy. and are subject to reduction commitments under WTO agreements.

Question 4

Blue box measures WTO

Answer 4

They distort trade but require producers to limit production. Exempt from reduction commitments.

Question 5

de- minimis

Answer 5

support allowed even if trade distortive- 5% and 10% for developed and developing respectively (% of total value of production)

Question 6

peace clause

Answer 6

It allows developing countries to maintain subsidies beyond their agreed-upon limits without facing trade disputes until a permanent solution is negotiated. The Peace Clause aims to ensure food security and support rural development in developing countries by allowing them to continue their domestic support programs without facing immediate legal action from other WTO members. As of the last extension in 2015, the Peace Clause remained in effect until a permanent solution is reached through further negotiations.

Question 7

support price when and why

Answer 7

Generally announced at sowing time. These prices guarantee to the farmer that, in the event of excessive production leading to oversupply in the market, prices of his produce will not fall below the support price.

Question 8

actual price in a normal year given to farmer by govt on a crop

Answer 8

These prices are generally higher than the support prices but lower than the free market prices in normal years.

Question 9

Minimum Support Prices, Procurement Prices, Issue Prices

Answer 9

MSP-These provide a long term guarantee to the producers, that in case of glut, prices will not fall below these announced minimum prices. The Government started large scale procurement of food grains at the MSP to ensure its intent.
PP-These are higher than MSP and are meant essentially for the purchase of quantities needed by the Government to maintain its PDS and for building up the Buffer Stock.
IP-These indicate prices at which the Government supplies food grains through Fair Price shops and ration depots.

Question 10

Commission for Agricultural Costs and Prices (CACP) earlier known as

Answer 10

Agricultural Price Commission in 1965

Question 11

Commission for Agricultural Costs and Prices (CACP) organizational structure

Answer 11

Is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India. Currently, the Commission comprises a Chairman, Member Secretary, one Member (Official) and two Members (Non- Official). The non-official members are representatives of the farming community and usually have an active association with the farming community.

Question 12

Commission for Agricultural Costs and Prices (CACP) job

Answer 12

It is mandated to recommend minimum support prices (MSPs) As of now, CACP recommends MSPs of 23 commodities, which comprise
* 7 cereals (paddy, wheat, maize, sorghum, pearl millet, barley and ragi)
* 5 pulses (gram, tur, moong, urad, lentil/Masur)
* 7 oilseeds (groundnut, rapeseed/mustard, soyabean, seasmum, sunflower, safflower, nigerseed)
* 4 commercial crops (copra, sugarcane, cotton and raw jute).

Question 13

form in which the CACP submits its recommendations to the government

Answer 13

CACP submits its recommendations to the government in the form of Price Policy Reports every year, separately for six groups of commodities namely Kharif crops, Rabi crops, Sugarcane, Raw Jute and Copra.

Question 14

MSP cereals

Answer 14

Please Wear Many Sweaters, Perhaps Real Blankets- 7 cereals (paddy, wheat, maize, sorghum, pearl millet, ragi and barley)

Question 15

MSP Pulses

Answer 15

Grandma Told Me Urchins (May)Laugh- gram, tur, moong, urad, lentil/Masur

Question 16

MSP oilseeds

Answer 16

G: Groundnut
R: Rapeseed/Mustard
O: Soyabean
S: Safflower
S: Sunflower
S: Sesamum
N: Nigerseed

Question 17

MSP Commercial Crops

Answer 17

Cool Summers, Juicy Citrus- copra, sugarcane, raw jute, cotton).

Question 18

Determination of MSP

Answer 18

MSP’s of 23 crops is recommended by Commission for Agricultural Costs and Prices (CACP). The CACP is supposed to consider various factors while recommending the MSP for a commodity, including cost of cultivation. It also takes into account the supply and demand situation for the commodity; market price trends (domestic and global) and parity vis-à-vis other crops; and implications for consumers (inflation), environment (soil and water use) and terms of trade between agriculture and non-agriculture sectors.

Question 19

MSP production cost for every crop

Answer 19

The CACP further projects three kinds of production cost for every crop, both at state and all-India average levels. These include:
o Cost A2: Includes the actual costs paid by farmer for purchase of various inputs like
seeds, fertilisers, pesticides, hired labour, rent of land & machinery, if hired.
o Cost A2 +FL: FL refers to Family Labour. When the unaccounted family labour cost is
accounted and added to cost A2, it becomes A2+FL.
o Cost C2: C2 stands for Comprehensive Cost. It includes notional costs of family labour,
notional rent of owned land and notional interest on owned capital.

Question 20

does CACP actually do field based assessments?

Answer 20

(CACP) doesn’t directly calculate the costs involved in agricultural production through field-based assessments. Instead, it relies on the estimates provided by the Directorate of Economics & Statistics in the Agriculture Ministry. These estimates are specific to each state and each crop, detailing the costs associated with various inputs such as seeds, fertilizers, labor, machinery, etc., required for agricultural production. The CACP then uses these state-wise and crop-specific production cost estimates as a basis for its projections and recommendations regarding minimum support prices (MSPs) for agricultural commodities. These projections take into account likely changes in input costs based on the latest price
data from other sources such as the Labour Bureau and Office of the Economic Adviser.

Question 21

the MSPs of ‘toria’ and ‘de-husked coconut’ are fixed on the basis of what?

Answer 21

rapeseed/mustard and copra respectively.

Question 22

MSP for how many crops in total?

Answer 22

25. CACP only 23

Question 23

what is MSP for sugarcane called?

Answer 23

Sugarcane for which it is called Fair and Remunerative Price (FRP). For sugarcane, Ministry of Consumer Affairs recommend Fair and Remunerative Price (FRP