Commission for Agricultural Cost and Prices (CACP)
The Commission for Agricultural Cost and Prices (CACP) is an autonomous body under the Ministry of Agriculture and Farmers Welfare, Government of India. It was established in 1965 to advise the government on matters relating to agricultural costs, prices, and production. The CACP is headed by a Chairman, who is assisted by a Vice-Chairman and a number of members. The CACP has a Secretariat, which is headed by a Secretary.
- Mandate and Functions
- Composition of the Commission
- Methodology for Price Determination
- Minimum Support Price (MSP) RecommendationsMinimum Support
- Price Policy Reports
- Data Collection and Analysis
- Stakeholder Consultations
- Interaction with Government
Mandate and Functions
The Commission for Agricultural Cost and Prices (CACP) is a key advisory body attached to India’s Ministry of Agriculture and Farmers Welfare. Its core mandate is to recommend Minimum Support Prices (MSPs) for major agricultural commodities. The CACP also advises the government on a range of pricing policies that affect the agricultural sector.
Composition of the Commission
The CACP is led by a Chairman and comprises several members. These include a Member Secretary, an official member, and non-official members who are experts in agriculture and represent the farming community.
Methodology for Price Determination
The CACP uses a comprehensive methodology to determine MSPs. It considers various factors, including:
- Cost of production: All paid-out costs, imputed value of unpaid family labor, land rent, and interest on fixed capital.
- Input price changes: Takes into account variations in the prices of fertilizers, seeds, fuel, etc.
- Market Price trends: Domestic and international market prices form a crucial component.
- Demand and supply conditions: The balance between demand and supply plays a role in price setting.
- Parity between prices of inputs and outputs: Aimed at ensuring a reasonable return for farmers.
Minimum Support Price (MSP) Recommendations
The CACP meticulously calculates MSPs for 23 mandated crops for the Kharif and Rabi seasons. After thorough analysis, it submits its recommendations to the government. The government takes the final decision on MSPs, considering the CACP’s recommendations along with other relevant factors.
Price Policy Reports
The CACP prepares detailed price policy reports for different crops. These reports include in-depth analysis of production costs, market trends, price forecasts, and policy recommendations related to trade, procurement, and market interventions.
Data Collection and Analysis
The CACP relies on extensive data collection and analysis. It collaborates with state agencies and research institutions to collect data on production costs, farm-level prices, and market dynamics. Robust data analysis is crucial for evidence-based policy recommendations.
Stakeholder Consultations
In its price determination process, the CACP actively engages with a variety of stakeholders. It holds consultations with farmers’ organizations, state governments, agricultural experts, and IndustryIndustry representatives to gather diverse perspectives and insights.
Interaction with Government
The CACP maintains regular interaction with the government for effective policy formulation. It presents its recommendations, participates in policy discussions, and provides input on various agricultural pricing policies. The collaborative approach strengthens the government’s decision-making process concerning agricultural prices, ultimately benefiting the farming community.
The CACP’s main functions are to:
- Advise the government on matters relating to agricultural costs, prices, and production;
- Review the prices of agricultural commodities;
- Recommend to the government the minimum support prices (MSPs) for agricultural commodities;
- Review the implementation of the MSPs;
- Conduct studies on various aspects of agriculture; and
- Advise the government on any other matter relating to agriculture.
The CACP is a statutory body, and its recommendations are binding on the government. The CACP has been playing a vital role in the development of agriculture in India. Its recommendations have helped to ensure remunerative prices for farmers, and have also helped to stabilize the prices of agricultural commodities. The CACP has also played a significant role in the implementation of the MSPs.
The CACP has been criticized for its lack of Transparency and Accountability. It has also been criticized for its failure to take into account the interests of small and marginal farmers. However, the CACP remains an important institution in the Indian agricultural sector.
Frequently Asked Questions
What is the Commission for Agricultural Cost and Prices (CACP)?
The Commission for Agricultural Cost and Prices (CACP) is an autonomous body under the Ministry of Agriculture and Farmers Welfare, Government of India. It was established in 1965 to advise the government on matters relating to agricultural costs, prices, and production.
What are the functions of the CACP?
The CACP’s main functions are to:
- Advise the government on matters relating to agricultural costs, prices, and production;
- Review the prices of agricultural commodities;
- Recommend to the government the minimum support prices (MSPs) for agricultural commodities;
- Review the implementation of the MSPs;
- Conduct studies on various aspects of agriculture; and
- Advise the government on any other matter relating to agriculture.
What is the MSP?
The minimum support price (MSP) is a price that the government guarantees to pay to farmers for their produce. The MSP is set by the CACP, and is based on a number of factors, including the cost of production, the market prices of agricultural commodities, and the government’s policy objectives.
How does the CACP set the MSP?
The CACP sets the MSP by taking into account a number of factors, including the cost of production, the market prices of agricultural commodities, and the government’s policy objectives. The CACP also consults with farmers, agricultural experts, and other stakeholders before setting the MSP.
What are the benefits of the MSP?
The MSP provides a safety net for farmers, and helps to ensure that they get a fair price for their produce. The MSP also helps to stabilize the prices of agricultural commodities, and can help to increase production.
What are the criticisms of the MSP?
The MSP has been criticized for being too high, and for leading to overproduction. The MSP has also been criticized for benefiting large farmers at the expense of small and marginal farmers.
What is the future of the MSP?
The future of the MSP is uncertain. The government has been considering reforms to the MSP system, and it is possible that the MSP may be abolished in the future. However, the MSP is a popular policy, and it is likely that it will continue to be implemented in some form.
What is the primary function of this commission?
Its main role is to recommend minimum support prices (MSPs) for various agricultural crops, which helps in ensuring fair prices to farmers for their produce.
How often does the commission recommend prices?
The commission typically makes price recommendations for Kharif and Rabi seasons annually, ensuring that these recommendations are reviewed and implemented seasonally.
What factors does the commission consider when making its recommendations?
The commission considers several factors, including cost of production, changes in input prices, market price trends, demand and supply, and inter-crop price parity.
Does the commission’s recommendation directly affect the market?
While the recommendations are influential, they serve as a guideline for government procurement prices and do not directly set market prices. However, they do have a significant impact on procurement and subsidies.
Can farmers influence the recommendations of this commission?
Farmers and farmer organizations can provide inputs during consultations and through representations, but they do not directly influence the decision-making process of the commission.
What role does the commission play in Food Security?
By recommending fair and remunerative prices for farmers, the commission aims to encourage crop production, which is crucial for national food security.
What is the main role of this commission?
Its principal function is to recommend prices for agricultural commodities to ensure farmers receive fair compensation for their crops.
On what basis does the commission make its recommendations?
Recommendations are based on several factors including the cost of production, market price trends, and economic conditions affecting agriculture.
How do these recommendations affect farmers?
These recommended prices aim to protect farmers against sharp falls in agricultural prices and ensure economic stability for them.
What impact do these recommendations have on the economy?
They influence agricultural production patterns and help stabilize food prices, which in turn supports the broader economy.
Can stakeholders influence the recommendations made by this commission?
Yes, stakeholders including farmers, agricultural organizations, and Industry experts can provide input during the recommendation process.
MCQs
The Commission for Agricultural Cost and Prices (CACP) was established in:
- (a) 1965
- (b) 1975
- (CC) 1985
- (d) 1995
The CACP’s main functions are to:
- (a) Advise the government on matters relating to agricultural costs, prices, and production.
- (b) Review the prices of agricultural commodities.
- (C) Recommend to the government the minimum support prices (MSPs) for agricultural commodities.
- (d) All of the above.
What is the primary purpose of this government body?
- A) To regulate the prices of consumer goods
- B) To recommend support prices for agricultural products
- C) To oversee agricultural education
- D) To manage agricultural imports and exports
How often does this body typically make its recommendations?
- A) Biannually
- B) Quarterly
- C) Annually
- D) Monthly
Which of the following factors is considered by this body when making recommendations?
- A) Stock market trends
- B) International trade agreements
- C) Cost of production and market trends
- D) Political ElectionsElections results
What impact do the recommendations of this body have?
- A) They set legal standards for food safety
- B) They guide government procurement prices
- C) They determine export tariffs
- D) They control private sector wages
Who can provide input into the decision-making process of this body?
- A) Only government officials
- B) Farmers and farmer organizations
- C) International bodies
- D) Local municipalities
What role does this body play in national food security?
- A) It funds food distribution programs
- B) It encourages sustainable agricultural practices
- C) It recommends prices to encourage production
- D) It builds agricultural InfrastructureInfrastructure
What is the primary purpose of this body?
- A) To oversee national agricultural policies
- B) To recommend agricultural support prices
- C) To manage water resources in farming areas
- D) To regulate the use of agricultural chemicals
How frequently does this body typically issue its recommendations?
- A) Twice a year
- B) Once a year
- C) Every quarter
- D) Every month
Which of the following is a factor considered by this body when making its price recommendations?
- A) International currency exchange rates
- B) Domestic production costs
- C) Global technological advancements
- D) Consumer fashion trends
What is the impact of this body’s recommendations on farmers?
- A) They determine export licenses
- B) They set minimum support prices
- C) They provide direct financial subsidies
- D) They regulate crop insurance rates
Who can influence the decision-making process of this body?
- A) Only government policymakers
- B) All citizens through public voting
- C) Agricultural stakeholders during consultations
- D) International trade organizations
What role does this body play in food security?
- A) It regulates food distribution channels
- B) It supports price stabilization efforts
- C) It enforces health and safety regulations in food production
- D) It focuses on importing food products