Why is it in the news?

• The primary demand (out of 12 demands) of protesting Punjab farmers is for a legal guarantee of Minimum Support Price (MSP) and adherence to crop price determination based on the recommendations of the Swaminathan Commission.

 Major Findings/Recommendations

 Public Investment in Agriculture:

• The commission identified inadequate public investment and insufficient public action as fundamental issues contributing to agricultural distress.
• It emphasized the need for increased public investment in the agricultural sector to address these underlying issues effectively.

Marketing Reforms:

• The NCF recommended significant reforms in agricultural marketing, including the introduction of futures and options trading in agricultural commodities.
• It proposed the supervision and regulation of agricultural commodity trading by an autonomous body similar to the Securities and Exchange Board of India (SEBI).

Review of Legal Instruments:

• The commission highlighted the urgent need to review and potentially amend legal instruments such as the Essential Commodities Act.
• These legal instruments govern various aspects of agricultural marketing, storage, and processing, and the commission recognized the importance of updating them to better serve the interests of farmers.

Women in Agriculture:

• Recognizing the significant role of women in agriculture, the NCF proposed the establishment of a National Board for New Deal for Women in Agriculture.
• This proposed board, under the Union Food and Agriculture Minister, aimed to address the specific challenges and opportunities faced by women farmers.

Minimum Support Price (MSP):

• The NCF recommended that the Minimum Support Price (MSP) for agricultural produce should be set at least 50% more than the weighted average cost of production.
• It also suggested that the government should purchase agricultural produce at MSP plus cost escalation since the announcement of MSP to ensure fair returns to farmers.

Continuation of MSP:

• Despite acknowledging weaknesses in the existing MSP system, the commission suggested that MSP might need to be continued in the foreseeable future.
• However, it emphasized the importance of improving the implementation of MSP across different regions to ensure regional balance.

Formula for Price Determination:

• The commission proposed a formula for price determination based on the cost of production.
• It recommended adopting the C2 cost of production for efficient regions and A2 + FL costs for relatively high-cost regions.

Promotion of Innovation:

• To encourage innovation in agriculture, the NCF advocated for the establishment of Farm Schools.
• These schools would serve as centres for spreading innovative farming methods and techniques among farmers.

Contract Farming:

• The commission recommended the development of a farmer-centric ‘Code of Conduct’ for contract farming arrangements.
• It also encouraged the formation of farmer groups or organizations to negotiate with purchasers and safeguard the interests of small farmers involved in contract farming.

APMC Reforms:

• The NCF proposed significant reforms to Agricultural Produce Market Committee (APMC) laws to encourage private sector or cooperative involvement in establishing markets and developing marketing infrastructure.
• It also called for the rationalization of market fees and other charges associated with APMC operations.

Public Distribution System (PDS):

• The commission suggested that the government should procure staple grains needed for the Public Distribution System (PDS) at prices equivalent to those offered by private traders to farmers.
• This recommendation aimed to ensure fair returns to farmers while also addressing food security concerns through the PDS.

Role of CACP:

• The commission recommended transforming the Commission for Agricultural Costs and Prices (CACP) into an autonomous statutory organization.
• It proposed that the primary mandate of the restructured CACP should be the recommendation of remunerative prices for agricultural commodities, taking into account the interests of both dry farming and irrigated areas.