What is C2+50 Formula of MSP, How this can change life of farmers?

Ground Report | New Delhi: What is C2+50 Formula of MSP; BJP MP Varun Gandhi on Saturday (November 19) urged Prime Minister Narendra Modi to accept the demand for a statutory MSP guarantee for farmers’ crops, saying his agitation would not end without it. He said MSP should also be based on the C2+50 percent formula of the Commission for Agricultural Costs and Prices

Gandhi thanked Modi for repealing three agricultural laws. “If this decision had been taken earlier, innocent lives would not have been lost.” He said a day after Modi announced the withdrawal of three agriculture laws.

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In his letter, Gandhi underlined the need to accede to the demand of farmers on the Minimum Support Price (MSP). “This movement will not end without a solution to this demand and there will be widespread anger among them, which will continue to emerge in one form or the other. Hence, it is very important for farmers to get a statutory guarantee of MSP for their crops,” he wrote.

What is C2+50 Formula of MSP

The National Commission for Farmers, constituted under the chairmanship of agricultural scientist MS Swaminathan, in its report had recommended that farmers should be given Minimum Support Price (MSP) under the C2+50 percent formula. That is, the total cost of the crop (C2) and the profit thereon is 50 percent.

As per the A2 method, the MSP is fixed at 50% more than the amount the farmer spends on farming including the expenditure on seeds, fertilisers, pesticides, and labour.

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The C2 method, on the other hand, performs calculations involving a wider range of inputs. This includes, in addition to the factors used to calculate A2, the economic value of the efforts of family members working on the farm, and the value of other expenses, including rent and other assets. After these are calculated, the MSP is determined to be 50% more than the amount derived.

Parameters for Calculation of MSP

On November 18, 2004, the Central Government constituted the National Commission on Farmers (NCF) with MS Swaminathan as its chairman.

  • The main objective of the committee was to come up with a sustainable farming system.
  • His objectives also included making agricultural commodities cost-competitive and more profitable.

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