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STATE AGRICULTURAL PRICES BOARD – STATE AGRICULTURAL PRICES BOARD – OBJECTIVES & ACTIVITIESOBJECTIVES & ACTIVITIES

The State Agricultural The State Agricultural Prices Board was Prices Board was

constituted in 1994 as constituted in 1994 as per G.O. (Ms) 29/94/ADper G.O. (Ms) 29/94/AD

dated 4/2/1994 with the dated 4/2/1994 with the following objectives:following objectives:

To organize the collection and analysis To organize the collection and analysis of data on the prices of important of data on the prices of important agricultural commodities produced agricultural commodities produced within the State, their demand, supply within the State, their demand, supply situations, export and import potentials situations, export and import potentials and to conduct studies on cost of and to conduct studies on cost of cultivation on a continuous basis.cultivation on a continuous basis.

To advise the Government as well as the To advise the Government as well as the farmers on the current and future price farmers on the current and future price situation in respect of major crops so as situation in respect of major crops so as to promote optimum land use and to promote optimum land use and cropping patterns within the State.cropping patterns within the State.

To suggest improvements in market To suggest improvements in market structure and recommend methods structure and recommend methods of market intervention when of market intervention when necessary so as to ensure necessary so as to ensure remunerative prices to producers remunerative prices to producers and to encourage the adoption of and to encourage the adoption of improved technology in agricultural improved technology in agricultural production and marketing.production and marketing.

To recommend minimum support To recommend minimum support price for major crops and to monitor price for major crops and to monitor the implementation of price support the implementation of price support programmes and working of various programmes and working of various institutions entrusted with the task, institutions entrusted with the task, so as to make them more effective.so as to make them more effective.

To organize research studies in the field of To organize research studies in the field of marketing and price policies and to examine the marketing and price policies and to examine the prevailing methods and cost of markets and prevailing methods and cost of markets and recommending fair price margins at different recommending fair price margins at different stages of marketing so as to prevent exploitation stages of marketing so as to prevent exploitation of the consumer.of the consumer.

To keep under review the developing price To keep under review the developing price situation and to make appropriate situation and to make appropriate recommendations as and when necessary within recommendations as and when necessary within the frame-work of the overall price policy.the frame-work of the overall price policy.

To suggest improvements in market To suggest improvements in market infrastructure such as market yards/warehouses, infrastructure such as market yards/warehouses, improved transportation, suitable institutions for improved transportation, suitable institutions for market intervention, etc.market intervention, etc.

To analyze the ‘terms of trade’ between To analyze the ‘terms of trade’ between agricultural and non-agricultural agricultural and non-agricultural sectors.sectors.

To study the impact of price policy on To study the impact of price policy on the rest of economy, particularly on the the rest of economy, particularly on the cost of living, wages industrial cost cost of living, wages industrial cost structure and competitiveness in structure and competitiveness in international markets.international markets.

To advise on any problem relating to To advise on any problem relating to agricultural prices and production that agricultural prices and production that may be referred to the Board by may be referred to the Board by Government from time to time.Government from time to time.

The Board is an advisory body to The Board is an advisory body to Government with the above mentioned Government with the above mentioned aims and objectives and is functioning aims and objectives and is functioning as an autonomous body under the as an autonomous body under the Ministry of Agriculture.Ministry of Agriculture.

The following were the personnel The following were the personnel who held the post of the who held the post of the

Chairman since the inception of Chairman since the inception of the Board.the Board.

Sl.NoSl.No. . Name Name PeriodPeriod

1.1. Dr. M.V.George 15.04.1994 to 31.03.2000 Dr. M.V.George 15.04.1994 to 31.03.2000

2.2. Dr. Thomas Varghese 05.05.2000 to 13.12.2001 Dr. Thomas Varghese 05.05.2000 to 13.12.2001

3.3. Sri. V.Thyagarajan 14.12.2001 to 17.06.2006 Sri. V.Thyagarajan 14.12.2001 to 17.06.2006

44 Dr. Thomas Varghese 23.06.2006 to 18-5-2011 Dr. Thomas Varghese 23.06.2006 to 18-5-2011

The organizational set The organizational set upup

Secretary

SUPPORTING STAFF Confidential Assistant-1

L.D.Clerk-1L.D.Typist-1

Peon-2Driver-1

INVESTIGATION STAFF Statistical Investigators-3

Some of the major activities so far Some of the major activities so far taken up by the Board:taken up by the Board:

Preparation of detailed project reports Preparation of detailed project reports on Price Policy for Kharif Crops every on Price Policy for Kharif Crops every year for submission to the Commission year for submission to the Commission for Agricultural Costs & Prices (CACP), for Agricultural Costs & Prices (CACP), Government of India, through the State Government of India, through the State Government. . For this, relevant data Government. . For this, relevant data are collected from various are collected from various sources/institutions and detailed sources/institutions and detailed answers to the questionnaire forwarded answers to the questionnaire forwarded by CACP are prepared and submitted to by CACP are prepared and submitted to CACP through State Government.CACP through State Government.

Preparation of detailed project report for Copra Preparation of detailed project report for Copra based on cost of production and other data based on cost of production and other data pertaining to the State every year for declaring pertaining to the State every year for declaring the Minimum Support Price (MSP) by the Minimum Support Price (MSP) by Government of India. The project report is Government of India. The project report is submitted to the Commission for Agrl: Costs & submitted to the Commission for Agrl: Costs & Prices (CACP), Government of India, New Delhi, Prices (CACP), Government of India, New Delhi, through the State Government. The Board also through the State Government. The Board also actively participates in the presentation and actively participates in the presentation and discussions convened by the CACP to finalize discussions convened by the CACP to finalize the support price of Coprathe support price of Copra..

The Board regularly prepares and submits The Board regularly prepares and submits weekly review reports on price trends of weekly review reports on price trends of agricultural commodities in various markets of agricultural commodities in various markets of the State, with detailed explanatory note to the State, with detailed explanatory note to the Government.the Government.

The Board had taken up a study on The Board had taken up a study on ‘Price Spread Analysis on Coconut & ‘Price Spread Analysis on Coconut & Banana in Thiruvananthapuram Banana in Thiruvananthapuram District’ in collaboration with the District’ in collaboration with the Department of Economics & Statistics, Department of Economics & Statistics, and completed the study and and completed the study and prepared the final report recently. prepared the final report recently. The Board is intending to spread the The Board is intending to spread the study in other Districts also.study in other Districts also.

The Board is regularly attending the The Board is regularly attending the Price Monitoring Committee meetings Price Monitoring Committee meetings of the Coconut Development Board, of the Coconut Development Board, Kochi.Kochi.

The Board prepared various draft The Board prepared various draft memoranda to Government of India as memoranda to Government of India as required by the State Government from required by the State Government from time to time. The Board had prepared a time to time. The Board had prepared a detailed Special Package Programme for detailed Special Package Programme for Palakkad, Wayanad and Kasargod Palakkad, Wayanad and Kasargod Districts, which were severely hit by Districts, which were severely hit by drought, by collecting inputs from drought, by collecting inputs from Departments like Agriculture, Animal Departments like Agriculture, Animal Husbandry, Dairy, Soil Conservation, Co-Husbandry, Dairy, Soil Conservation, Co-operation, Fisheries, Revenue, etc.operation, Fisheries, Revenue, etc.

Various representations and other Various representations and other matters received by Government and matters received by Government and referred to the Board for remarks and referred to the Board for remarks and comments are suitably answered.comments are suitably answered.

The Board prepares answers to the L.A. The Board prepares answers to the L.A. Interpellations /Call Attention Motions Interpellations /Call Attention Motions connected with agricultural sector and connected with agricultural sector and submit to Government for answering in submit to Government for answering in Kerala Legislative Assembly Sessions.Kerala Legislative Assembly Sessions.

In addition, reports and notes to In addition, reports and notes to Government on relevant topics are Government on relevant topics are being prepared and submitted to being prepared and submitted to Government from time to time.Government from time to time.

The Board had assisted in preparing The Board had assisted in preparing the project report on Market the project report on Market Intervention Scheme for Pepper, and Intervention Scheme for Pepper, and Arecanut and Coffee.Arecanut and Coffee.

The Board had taken a lead role in the The Board had taken a lead role in the preparation for Management of Root (wilt) preparation for Management of Root (wilt) affected Coconut hold9ngs and enhancement of affected Coconut hold9ngs and enhancement of productivity of coconut in Kerala with a total productivity of coconut in Kerala with a total outlay of Rs.1924 crores.outlay of Rs.1924 crores.

A detailed and scientific study on cost of A detailed and scientific study on cost of production of Coconut in Kerala was conducted production of Coconut in Kerala was conducted in association with Coconut Development in association with Coconut Development Board, Government of India and State Board, Government of India and State Department of Economics & StatisticsDepartment of Economics & Statistics

The Secretary of the Board had acted as the The Secretary of the Board had acted as the drawing & disbursing officer of the Commission drawing & disbursing officer of the Commission on WTO Concerns in Agriculture constituted on WTO Concerns in Agriculture constituted under the Chairmanship of under the Chairmanship of Prof.M.S.Swaminathan. All sittings were also Prof.M.S.Swaminathan. All sittings were also arranged by the Board.arranged by the Board.

Expert opinion on matters like Seed Bill Expert opinion on matters like Seed Bill 2004, APMC Act, Price Stabilization Fund, 2004, APMC Act, Price Stabilization Fund, Export-Import Policy, Foreign Direct Export-Import Policy, Foreign Direct Investment, VAT, Paddy Procurement, etc. Investment, VAT, Paddy Procurement, etc. were furnished to Government, as directed were furnished to Government, as directed by Government. by Government.

The Board had organized a State Level The Board had organized a State Level Workshop on Land Reforms and Contract Workshop on Land Reforms and Contract Farming which was inaugurated by the Farming which was inaugurated by the Honourable Minister for Agriculture & Coir Honourable Minister for Agriculture & Coir and lead papers were presented by and lead papers were presented by Dr.T.Haque, Chairman, CACP, New Delhi, Dr.T.Haque, Chairman, CACP, New Delhi, Additional Secretary of Government of India Additional Secretary of Government of India and representatives from international and representatives from international organizations.organizations.

The Board had conducted a study on the The Board had conducted a study on the terms of trade between agricultural and terms of trade between agricultural and non-agricultural sectors in Kerala in non-agricultural sectors in Kerala in collaboration with Centre for Development collaboration with Centre for Development Studies, Directorate of Economics & Studies, Directorate of Economics & Statistics and State Planning Board and Statistics and State Planning Board and published the report in 1998.published the report in 1998.

The Chairman of the Board has actively The Chairman of the Board has actively participated in the training programmes participated in the training programmes conducted by the Department of Agriculture conducted by the Department of Agriculture as well as Institute of Management in as well as Institute of Management in Government by giving lectures on selected Government by giving lectures on selected topics.topics.

The Board had assisted Government in The Board had assisted Government in matters relating to WTO until a separate matters relating to WTO until a separate WTO Cell was constituted.WTO Cell was constituted.

The Chairman had attended various The Chairman had attended various committees, seminars, etc. both at State committees, seminars, etc. both at State level and national level as directed by level and national level as directed by State Government.State Government.

Since the Board is an advisory body to Since the Board is an advisory body to Government, no schemes/plans are being Government, no schemes/plans are being operated by the Board directly, and operated by the Board directly, and hence, no physical achievement could be hence, no physical achievement could be worked out. However, due to the worked out. However, due to the intervention/follow up action of the Board intervention/follow up action of the Board and by timely announcement of Minimum and by timely announcement of Minimum Support price by Government, the farmers Support price by Government, the farmers are indirectly benefited by getting are indirectly benefited by getting remunerative price for their produce.remunerative price for their produce.

BACKGROUND NOTE ON PRICE POLICY BACKGROUND NOTE ON PRICE POLICY OF AGRICULTURE PRODUCE OBJECTIVESOF AGRICULTURE PRODUCE OBJECTIVESOF AGRICULTURAL PRICE POLICYOF AGRICULTURAL PRICE POLICY

The main objectives of the The main objectives of the Governments price policy for Governments price policy for agricultural produce are aimed at:agricultural produce are aimed at:

Ensuring remunerative prices to the Ensuring remunerative prices to the growers for their produce with a view growers for their produce with a view to encourage higher investment and to encourage higher investment and production, andproduction, and

To safeguard the interests of To safeguard the interests of consumers by making available consumers by making available supplies at reasonable pricessupplies at reasonable prices

PROCEDURE OF FIXATION OF MSP PROCEDURE OF FIXATION OF MSP BY THE GOVERNEMENTBY THE GOVERNEMENT

The Government decides on the MSPs The Government decides on the MSPs for various agricultural commodities for various agricultural commodities taking into account the taking into account the recommendations of Commission for recommendations of Commission for Agricultural Costs and Prices(CACP), Agricultural Costs and Prices(CACP), the views of State Governments and the views of State Governments and concerned Central Ministries as well as concerned Central Ministries as well as such as other relevant factors, which such as other relevant factors, which in the opinion of the Government, are in the opinion of the Government, are important for fixation of MSPs.important for fixation of MSPs.

CRITERIA ADOPTED BY THE CACP CRITERIA ADOPTED BY THE CACP FOR RECOMMENDING THE MSPFOR RECOMMENDING THE MSP

While recommending MSPs, the CACP keeps While recommending MSPs, the CACP keeps in view in view

the need to provide incentive to the producer the need to provide incentive to the producer for adapting improved technology and for for adapting improved technology and for developing a production pattern broadly in developing a production pattern broadly in the light of national requirements; the light of national requirements;

the need to ensure rational utilization of the need to ensure rational utilization of land, water and other production resources; land, water and other production resources;

the likely effect of the price policy on the rest the likely effect of the price policy on the rest of the economy, particularly on the cost of of the economy, particularly on the cost of living, level of wages, industrial cost living, level of wages, industrial cost structure, etc. and structure, etc. and

terms of trade between agricultural sector terms of trade between agricultural sector and non-agricultural sector.and non-agricultural sector.

FACTORS CONSIDERED BY THE CACPFACTORS CONSIDERED BY THE CACP Apart from making a comprehensive Apart from making a comprehensive

overview of the structure of the economy of overview of the structure of the economy of a particular commodity, the CACP considers a particular commodity, the CACP considers the following important factors while the following important factors while formulating its recommendations on price formulating its recommendations on price policypolicy

Cost of Production;Cost of Production; Changes in input pricesChanges in input prices Input/Output price parity;Input/Output price parity; Trends in market prices;Trends in market prices; Demand and supply situation;Demand and supply situation; Inter-crop price parity;Inter-crop price parity; Effect on Industrial cost structure;Effect on Industrial cost structure; Effect on general price level;Effect on general price level; Effect on cost of living ;Effect on cost of living ; International market price situation;International market price situation; Parity between prices paid and prices Parity between prices paid and prices

received by farmers (terms of trade)received by farmers (terms of trade)

COST OF PRODUCTIONCOST OF PRODUCTION The Cost of cultivation/production taken into The Cost of cultivation/production taken into

account includes all paid out costs, such as account includes all paid out costs, such as those incurred on account of hired human those incurred on account of hired human labour, bullock labour/machine labour (both labour, bullock labour/machine labour (both hired and owned) and rent paid for leased in hired and owned) and rent paid for leased in land besides cash and kind expenses on use of land besides cash and kind expenses on use of material inputs like seeds, fertilizers, manures, material inputs like seeds, fertilizers, manures, irrigation charges including cost of irrigation charges including cost of diesel/electricity for operation of pump sets, etc. diesel/electricity for operation of pump sets, etc. Besides, cost of production includes imputed Besides, cost of production includes imputed value of wages of family labour and rent for value of wages of family labour and rent for owned land. The cost also covers depreciation of owned land. The cost also covers depreciation of farm machinery and buildings. farm machinery and buildings. As such, the cost of production covers not only As such, the cost of production covers not only actual expenses in cash and kind but also actual expenses in cash and kind but also imputed value of owned assets including land imputed value of owned assets including land and family labour.and family labour.

Various crops under consideration of Various crops under consideration of minimum support price scheme are given in the minimum support price scheme are given in the following table-following table-

VARIOUS CROPS UNDER MINIMUM SUPPORT VARIOUS CROPS UNDER MINIMUM SUPPORT PRICEPRICE

Sl.No Commodity VarietySl.No Commodity Variety

1 KHARIF CROPS1 KHARIF CROPS

PADDY* CommonPADDY* Common

Grade ‘A’Grade ‘A’ 2 JOWAR Hybrid2 JOWAR Hybrid MaldandiMaldandi 3 BAJRA3 BAJRA 4 MAIZE4 MAIZE 5 RAGI5 RAGI 6 ARHAR (Tur)6 ARHAR (Tur) 7 MOONG7 MOONG 8 URAD8 URAD 9 COTTON F-414/H-777/J34 H-49 COTTON F-414/H-777/J34 H-4

10 GROUNDNUT IN SHELL10 GROUNDNUT IN SHELL 11 SUNFLOWER SEED11 SUNFLOWER SEED 12 SOYABEEN BLACK/YELLOW12 SOYABEEN BLACK/YELLOW 13 SESAMUM13 SESAMUM 14 NIGERSEED14 NIGERSEED

RABI CROPSRABI CROPS 15 WHEAT15 WHEAT 16 BARLEY16 BARLEY 17 GRAM17 GRAM 18 MASUR(LENTIL)18 MASUR(LENTIL) 1919 RAPESEED/MUSTARD RAPESEED/MUSTARD 20 SAFFLWOER20 SAFFLWOER 21 TORIA21 TORIA

OTHER CROPSOTHER CROPS 22 COPRA* Milling22 COPRA* Milling Ball Ball 23 JUTE23 JUTE 24 SUGARCANE24 SUGARCANE 25 TOBACCO(VFC) Black Soll(F2 25 TOBACCO(VFC) Black Soll(F2 Gr)Light Soll(L2 Gr)Gr)Light Soll(L2 Gr) Out of the above 25 crops only 2 crops namely paddy &coconut are Out of the above 25 crops only 2 crops namely paddy &coconut are

relevant for Keralarelevant for Kerala

HISTORY OF AGRICULTURAL MARKETING IN KERALAHISTORY OF AGRICULTURAL MARKETING IN KERALA

In order to save farmers from exploitation by In order to save farmers from exploitation by middlemen many Governments had promoted middlemen many Governments had promoted marketing of agricultural commodities in the marketing of agricultural commodities in the country through a network of regulated markets. country through a network of regulated markets. Most of the state Governments and Union Most of the state Governments and Union Territories except Kerala, Jammu & Kashmir and Territories except Kerala, Jammu & Kashmir and Manipur have enacted legislations to provide for Manipur have enacted legislations to provide for development and regulation of agricultural produce development and regulation of agricultural produce markets. As on 31.3.2001, 7177 markets have markets. As on 31.3.2001, 7177 markets have been covered under regulation. Regulated markets been covered under regulation. Regulated markets have helped in mitigating the market handicaps of have helped in mitigating the market handicaps of producer-sellers at the wholesale assembling level. producer-sellers at the wholesale assembling level. These markets have also provided physical These markets have also provided physical facilities and institutional environment to the facilities and institutional environment to the traders, processors and other market functionaries traders, processors and other market functionaries for conducting their trading activities.for conducting their trading activities.

The idea of regulating agricultural produce The idea of regulating agricultural produce markets was first conceived by the end of 19th markets was first conceived by the end of 19th century. The first market at Karanja was century. The first market at Karanja was regulated in 1886 under Hyderabad Residency regulated in 1886 under Hyderabad Residency Order. Many states followed suit and under the Order. Many states followed suit and under the Madras Commercial Crop Act of 1933, five Madras Commercial Crop Act of 1933, five regulated markets were established in the regulated markets were established in the Malabar district of erstwhile Madras Presidency. Malabar district of erstwhile Madras Presidency. These markets were at Vattamkulam, Othukungal, These markets were at Vattamkulam, Othukungal, Perambra, Thalakalathur and Kanhangad. Perambra, Thalakalathur and Kanhangad. Farmers utilized marketing facility to their Farmers utilized marketing facility to their advantage for a long time. The All India Report on advantage for a long time. The All India Report on working of regulated market, 1968 states as working of regulated market, 1968 states as follows:follows:

““In Kerala at present the old Madras Commercial In Kerala at present the old Madras Commercial Crop Act 1933 is in force in Malabar District which Crop Act 1933 is in force in Malabar District which formed part of Madras State before the re-formed part of Madras State before the re-organization of the state. organization of the state.

Many attempts were taken for an enactment, but Many attempts were taken for an enactment, but did not succeed. Due to the failure of the Govt to did not succeed. Due to the failure of the Govt to enact a Comprehensive Act applicable to the enact a Comprehensive Act applicable to the entire state, the Hon’ble High Court in 1997 has entire state, the Hon’ble High Court in 1997 has declared the Act 1933 as invalid.declared the Act 1933 as invalid.

EEC MARKETS IN KERALAEEC MARKETS IN KERALA There are six Agricultural Wholesale There are six Agricultural Wholesale

Markets constructed with the assistance of Markets constructed with the assistance of European Economic Community owned and European Economic Community owned and operated by Department of Agriculture. operated by Department of Agriculture. The markets were established with an The markets were established with an intension to help farmers by enacting APMC intension to help farmers by enacting APMC in the State From 2010 onwards, auction of in the State From 2010 onwards, auction of farmer’s produce has been started in these farmer’s produce has been started in these markets with agricultural produce being markets with agricultural produce being sourced from farmers clusters formed for sourced from farmers clusters formed for this purpose. Transport of agricultural this purpose. Transport of agricultural produce from farmer fields to these produce from farmer fields to these markets has been arranged by market markets has been arranged by market themselves. Priority has been given for themselves. Priority has been given for direct marketing by farmers.direct marketing by farmers.

Since APMC Act has not been enacted in the Since APMC Act has not been enacted in the State, and hence, there are no regulated State, and hence, there are no regulated markets. There are six wholesale agricultural markets. There are six wholesale agricultural markets under Department of Agriculture at markets under Department of Agriculture at Anayara and Nedumangad in Anayara and Nedumangad in Thiruvananthapuram, Maradu and Muvattupuzha Thiruvananthapuram, Maradu and Muvattupuzha in Ernakulam, Vengeri in Kozhikode and Sulthan in Ernakulam, Vengeri in Kozhikode and Sulthan Bathery in Wayanad. The scheme for Bathery in Wayanad. The scheme for strengthening of six wholesale markets was strengthening of six wholesale markets was implemented during 2010-11 utilizing an amount implemented during 2010-11 utilizing an amount of 107.50 lakhs. In addition, 125 lakhs had been of 107.50 lakhs. In addition, 125 lakhs had been set apart for providing warehouse/cold storage set apart for providing warehouse/cold storage and transport subsidy to farmers for the and transport subsidy to farmers for the wholesale markets Anayara, Nedumangad, wholesale markets Anayara, Nedumangad, Muvattupuzha and Maradu. Cold storage Muvattupuzha and Maradu. Cold storage facilities have already been established at facilities have already been established at Anayara and work is in progress in the remaining Anayara and work is in progress in the remaining markets.markets.

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