Agriculture price policy ppt presentation components of app objective elements

1. AGRICULTURE
PRICING POLICY
Prepared by : gourav garg
M.A economics

2. AGRICULTURE PRICING POLICY
• Agriculture pricing policy is the tool for
influencing the prices of agriculture products.
It is an incentive to the producer to produce a
particular product according the desired
quantity.

3. FACTORS AFFECTING AGRICULTURE PRICING
POLICY
• Cost of production
• Changes in input prices
• Input/output price parity
• Trends in market pricing
• Inter crop price parity
• Demand and supply situation
• Effect on industrial cost structure
• Effect on general price level
• Effect on cost of living
• International market price situation
• Parity between prices paid and prices received by farmers (terms of trade)

4. MAIN OBJECTIVES OF AGRICULTURE PRICING
POLICY
• Raising the productivity of inputs
• Raising value added per hectare
• Protecting the interest of poor farmers
• Modernising agriculture sector
• Checking environment degradation
• Agriculture research and training
• Removing bureaucratic obstacles
• Improving agriculture marketing

5. MAIN ELEMENTS OF AGRICULTURE PRICE
POLICY
1. Fixation of product prices
• “Negative” price policy
. For accelerating the economic growth negative agriculture price policy practised
by a large no. Of countries in their early stages of their development
• Main objective of policy is to keep prices of food and raw material relatively low
(when compared with the prices of industrial products) So as to facilitate the
growth of the industrial and territory sector through increased profits and savings
of these sectors

6. •“Positive” price policy
. In contrast with the Negative policy,a number of
developing countries today follow what may be
termed as the “positive” price policy which assures
the farmer,a fair Price for his procedure.such a policy
is considered necessary because of the realisation
that unless the agriculture sector attains some critical
minimum rate of growth,it would not be possible to
attain the general target of economic growth and
development.

7. 2. PRICE POLICY FOR AGRICULTURAL
INPUTS
• Agriculture price policy does not cover only the fixation of price of
agriculture crops.its other aspects is concerned with the prices of agriculture
input.our focus in the discussion in preceding paragraph has been on the
prices Of agricultural crops. There,we have argued in favour of a ‘positive’
price for the agricultural products in order to encourage the adoption of
improved technology and the conseqent growth of agricultural output.
• Some people argue that the Same objective can be better achieved through
subsidising the farmer in the purchase of inputs rather than through
guarantees of minimum prices of agriculture commodities.

8. 3. CONSUMER PROTECTION AND
AGRICULTURAL PRICE POLICY
• This is the third aspect of agricultural price policy. This aspect of
price policy is particularly complicated as it necessarily involves
balancing of conflicting interests of million of poor consumer,on
the one hand, and of the farmers,on the other.The issue can also
be looked as one of reconciling the interest of the village and city.
While we have discussed the significance of rising the prices of
Agricultural output as an inducement to agricultural growth,we
should also recognise that agriculture produces consumer goods
whose purchase cover the bulk of the expenditure of low income
people. If prices of food articles are allowed to increase, the low
income people are hit hard.

9. 4. ANCILLARY POLICIES
• Firstly it is important that sufficient resources in terms of men and
materials,be allocated to domestic research efforts so as to
generate New crops Verities implements which forms the basis for
yield increasing, cost-reducing techniques changes in agriculture
• Inputs must be made readily available to the farmers. This implies
that timely steps to produce certain crucial inputs at home or to
import the Same, must be taken
• Thirdly, steps must be taken to ensure a smooth functioning of the
system of agriculture marketing in case, the marketing system is
inefficient due to any reason, there will be large difference
between the prices which the government assures and what the
farmers ultimately get

10. INSTRUMENTS OF AGRICULTURE PRICE POLICY
1.Minimum support price
. It starts from 1970s.
minimum support price is a form of market intervention by the
government of India to ensure agricultural produces against any
sharp fall in farm prices
It is announced in the beginning of the sowing season
Government agencies purchase the output at the MSP in case the
market price falls below the MSP
Major objective: support farmers from distress sales
Procure food grains for public distribution

14. 2. MARKET INTERVENTION SCHEME
• Procurement of parishable and horticulture
commodities if market price falls
• Implemented when at least 10% increase in production
or 10% decrease in the ruling rates over the previous
normal year
• Procurement made by NAFED (national agriculture
cooperative marketing federation of India limited)

15. 3. PUBLIC DISTRIBUTION SYSTEM
• Important element of food security
• Management of supplies of essential commodities and
maintenance of their uninterrupted flow at affordable prices
• Beneficiary: BPL,APL households, antyodaya card holder
• Preventing hoarding and black marketing of essential
commodities

16. 4. PRICE SUPPORT SCHEME
• Implemented for oil seeds and pulses through NAFED:
nodal procurement agency for oil seeds and pulses, apart
from cotton corporation of India
• NAFED purchase oils Seeds and pulses from farmers
when there price fall below MSP

17. • EVALUATION OF AGRICULTURE PRICE POLICY
• Conflicting considerations in price fixation
• Lack of data
• No fixation of ceiling prices
• Partial impacts of price policy on Agricultural
development
• Politicisation of price policy
• Reduced emphasis on non price factors
• No minimum support price for fruit and vegetables

18. • Excessive amount of input subsidies
• Excessive food subsidies
• Defective public distribution system
• Fixing of uniform prices for country as a
whole

19. • SUGGESTIONS FOR REORIENTATION OF
AGRICULTURE PRICE POLICY
• Systematic attempts to orient agricultural planning towards effective use of
resources endowments
• A much expanded employment-cum investment programme for
conservation and upgration of land and water resources
• Greater priority for dry land agriculture
• A substantial set-up in the proportion of total planned resources earmarked.
For agriculture/rural sectors
• Time bond targets for provision of rural infrastructures
• Comparitive advantage of growth climatic areas of the country
• Policy regarding growth of inputs and extention services and marketing