Claim: We have increased MSP for notified crops to at least 1.5 times that of the production cost: PM Modi #FarmersWithModi
Fact: Misleading, the input costs calculated for the purpose of fixing a minimum support price do not include imputed rent and interest on owned land and capital, as recommended by the Swaminathan Committee.
Explanation: The increase is based on the calculation of A2+FL (actual paid-out cost plus imputed value of family labour) and not C2 (comprehensive cost including imputed rent and interest on owned land and capital) as recommended by the Swaminathan Committee. The formula is “A2+FL, that is the understanding I have from the agriculture ministry,” Jaitley said, based on The Economic Times report on February 9, 2018.
Based on A2+FL for rabi (winter) crops, as per the July 2016 commission for agriculture costs and prices report, the increase for wheat is 103% (Rs 797/quintal). If the C2 formula were applied, the MSP would be Rs 406 more per quintal (Rs 1203).