MSP nahin MRP….!!! Minimum Support Price nahin …!! Maximum Retail Price ..!!!! Why #FarmBills2020 is important? Let me explain this in detail. Whenever you buy anything from a kirana shop like Chips,Cold drink ,Soap Washing Powder its MRP is printed on it .
What is MRP ? MRP is Maximum Retail Price which a Company can charge from a Consumer which includes 1) Cost of Raw Materials 2)Cost of Employees 3) Cost of Capital 4)Cost of Transportation 5)Cost of Advertisement 6) Cost of Manufacturing 7 ) Wholesaler Margin 8 ) Retailer margin
So a MRP is the Maximum price charged to Consumers. Now the Consumer is the person which creates the demand for that item like Chips, Cold Drink ,Washing Powder at that MRP . So MRP is the key as it includes every cost and margin and Consumer is willing to pay that cost .
So this demand from Consumer at MRP encourages the Supplier or Manufacturer to produce more of such items as Supplier and Manufacturer is guaranteed that MRP by Consumer that he or she is going to buy that product.
So Manufacturer or Supplier will produce those products which is in demand by consumers and will stop producing those which consumers dont like or dont buy. Whereas MSP Minimum Support price is a system in which Producer is provided a Price which is Guaranteed by Government.
For 23 Commodities which is based on a Formula given by Government. But mainly two crops Wheat and Paddy are purchased by Government that too in states of Punjab and Haryana. Problem is demand of Wheat and Paddy is less and India is Surplus in Wheat and Paddy and India Imports Edible Oil like Soyabean Oil and Palm Oil upto 70 of Its Needs. MSP reaches to only 6 % of Indian Farmers and rest dont even get it. Why Government cant buy all Crops at MSP is the Next Question ?
For giving MSP Indian Government needs atleast 12 Lakh Crore which is 50 % of India’s Annual Budget which is practically not Possible. So what’s the Solution. Solution is MRP . Maximum Retail Price . Yes but howz it possible.
Its possible as Following :
1. Allowing Farmers to sell their produce directly to Consumers through online Platforms like : @HarvestingFN @Grofers@bigbasket_com These Platforms will ensure MRP for Consumers and Payment guarantees to Farmers.
2. Online Platforms like @HarvestingFN@Grofers@bigbasket_com will create a supply chain and a network of Transportation for Farmers where consumers are ensured Fresh Produce and Farmers will get ensured price .
3. Contract farming: Now these online Platforms can now do contact farming Farmers and ask them to produce at a fixed Guaranteed price the Commodity which is in demand. Even Manufacturers of Edible Oil ,Wheat flour ,Besan can directly get into Contracts with Farmers.
4. FPOs : Farmers can now create Farmers Producing Organisations which can do contracts with Manufacturers and Online Retail chains and produce those products which are in Demand and MRP Maximum Retail Price will ensure everyone the margin they are Expecting and make money.
5. So Maximum Retail Price will ensure through Demand and Supply good margins to everyone and Farmer will produce through Contract Farming a commodity which is in Demand . Demand and supply will keep prices in check. Even apps like @ZomatoIN@flipkartsupport@amazonIN can help.
How to make an FPO : https://www.youtube.com/watch?v=5g-3VkSVbak&feature=youtu.be