Niti Aayog suggests setting up of Agri Tribunal, Crop Auctioning at Reserve Price

Stating that raising MSP can only be a partial solution to increase farmers' income Niti Aayog, government think tank on 19 December pitched for setting up an agricultural tribunal and auctioning of farm produce in the mandis by setting minimum reserve price.

In its 'Strategy for New India@75' document, which was released by Finance Minister of India Arun Jaitley, the government think tank suggested many reform measures to raise the farm sector growth and double farmers' income by 2022.

It also said "The Centre should consider replacing the Commission on Agricultural Costs and Prices (CACP) by an agriculture tribunal lined up with the provisions of Article 323B of the Constitution".

It must be noted that the CACP is a government's advisory body that recommends the minimum support price (MSP) for 22 kharif as well as Rabi crops. The government generally accepts the suggestion made by the CACP.

The document further said that the Niti Aayog must set up a group to check "replacing the minimum support price (MSP) by a minimum reserve price that could be the starting point for auctions at mandis".

The group must also check if MSP can be fixed based on the 3 different criteria i.e. surplus produce, products in shortage in domestic market but available worldwide and products that are in deficit both domestically and globally, said the report.

Niti Aayog also suggested examining options for including private traders operating in markets to balance the minimum support price regime through a system of incentives and commission payments.

It also stressed upon the need to encourage futures trade and elimination of entry barriers to boost market depth.

Regarding farm exports, the Aayog suggested that the government must come up with a logical and stable agricultural export policy, preferably with a 5-10 year time horizon and an included provision for a mid-term review.

The document has also discussed about modernising the agricultural sector by improving irrigation facilities, post harvesting management, marketing reforms and improved crop insurance products.