Cabinet Approved Increase In Copra Minimum Support Price For 2024 Season

Utkarsh Classes Last Updated 28-12-2023

Cabinet Approved Increase In Copra Minimum Support Price For 2024 Season

Economy 4 min read

The Minimum Support Price (MSP) for copra for the 2024 season has been approved by the Cabinet Committee on Economic Affairs, CCEA. Over the previous season, the MSP for milling copra increased by 300 rupees per quintal and for ball copra by 250 rupees per quintal. Higher MSP will provide greater remuneration for coconut growers. This ensures a margin of 51.84 percent for milling copra and 63.26 percent for ball copra, which is much greater than 1.5 times the all-India weighted average cost of production.

What is copra?

Copra, also known as Gari or Gola, is the dried portion of a coconut.
Milling copra is used to extract oil, whereas ball or edible copra is eaten as a dry fruit and utilised in religious ceremonies.
Milling copra is primarily produced in Kerala and Tamil Nadu, whereas ball copra is primarily produced in Karnataka.

Minimum Support Prices (MSP)

The Minimum Support Price (MSP) is a remunerative price set to assist farmers in receiving acceptable returns on their produce.
The MSP is the price at which the government buys crops from farmers, and it is calculated to be at least one-and-a-half times the producers' cost of production.
The CACP is a Ministry of Agriculture and Farmers Welfare branch.

Crops Under MSP

The Commission for Agricultural Costs and Prices (CACP) proposes minimum support prices (MSPs) for 22 mandated commodities, as well as a fair and remunerative price (FRP) for sugarcane.
The compulsory crops comprise 14 kharif crops, 6 rabi crops, and two other commercial crops.

Cabinet Committee on Economic Affairs (CCEA)

The Cabinet Committee on Economic Affairs (CCEA), led by the Prime Minister of India, makes the ultimate decision (gives approval) on the amount of MSPs.
The MSP is intended to ensure remunerative prices for growers' produce while also encouraging crop diversification.

Commission for Agricultural Costs and Prices (CACP)

The Commission for Agricultural Costs and Prices (CACP), established in 1965, is a decentralised Government of India (GoI) agency.
The Agricultural Costs and Prices Commission (CACP) was formerly known as the Agricultural Prices Commission.
In 1985, it was renamed the Commission for Agricultural Costs and Prices.
It is an expert organisation that recommends Minimum Support Prices (MSPs) based on a variety of considerations.
When advising MSP, CACP takes into account both A2+FL and C2 expenses.
CACP estimates that the return cost is just A2+FL.
However, CACP uses C2 prices primarily as a benchmark reference cost (opportunity cost) to determine if the MSPs they offer cover these expenses in some of the key producing States.