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Historical context

• The emergence of agricultural Price Policy in India was in the backdrop of food scarcity and price fluctuations provoked by drought, floods and international prices for exports and imports. This policy in general was directed towards ensuring reasonable food prices for consumers by providing food grains through Public Distribution System (PDS) and inducing adoption of the new technology for increasing yield by providing a price support mechanism through Minimum Support Price (MSP) system.
• In recognition of the importance of assuring reasonable produce prices to the farmers, motivating them to adopt improved technology and to promote investment by them in farm enterprises, the Agricultural Prices Commission (renamed as the Commission for Agricultural Costs and Prices in 1985) was established in 1965 for advising the Government on agricultural prices policy on a continuing basis.
• The thrust of the policy in 1965 was to evolve a balanced and integrated structure to meet the overall needs of the economy and with due regard to the interests of the producers and the consumers. The first Commission was headed by Prof M L Dantwala and in its final report the Commission suggested the Minimum Support Prices for Paddy.

Minimum Support Price (MSP):- is a form of market intervention by the Government of Indiato insure agricultural producers against any sharp fall in farm prices.

• The minimum support prices are announced by the Government of Indiaat the beginning of the sowing season for certain crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP). 
• MSP is price fixed by Government of India to protect theproducer – farmers – against excessive fall in price during bumperproduction years.
• The minimum support prices are a guarantee price for their produce from the Government that this will be the minimum price at which their product will fetch.
• If the market price is above,MSP,the farmer can obviously sell it at the marketIn case the market price for the commodity falls below the announced minimum price due to bumper production and glut in the market,government agencies purchase the entire quantity offered by the farmers at the announced minimum price.

  The major objectives are to support the farmers from distress sales and to procure food grains for public distribution.

  As of 2015-16, Minimum support prices are currently announced for 24 commodities,which includes food grains like Wheat,paddy etc and non-food crops like raw cotton,raw jute etc.

• A pilot project under the Direct Payment Deficiency System (DPDS) for paying MSP guarantee for the cotton farmers has been initiated at Hinganghat taluka of Maharashtra in 2015. Under this system, the farmers will directly get the amount which is the difference between the Minimum Support Price (MSP) and the market price, should the market price fall below the MSP. For availing of the benefit, farmers would have to present proof of cotton sold at Agriculture Produce Market Committee yards, plus other papers such as ownership document, yield estimation and other details. If the pilot is successful, the DPDS would be rolled out in all cotton growing regions, as per the present decision. DPDS is essentially a mode of direct benefit transfer to cotton farmers.

  Then there is this concept ofPROCUREMENT PRICE, which is the price at which government procures food grains for buffer stocking and PDS purposes through FCI.

• Consider the situation where,in the wake of an imminent food shortage that may occur, the traders are willing to procure food grains in advance,driving up the market price.

• When the market prices are much higher than the MSP,the farmer will obviously be willing to sell it in the market.
• But the government,still, needs to procure food grains on its own to meet its distribution commitments inPDS at subsidised rates(issue price) and to create the buffer stock,necessary to intervene from supply side in case there is food deficiency and high food inflation.
• Therefore the government so as to fulfil these commitments,declares a Procurement price which is > or = to the MSP.

  The major difference between MSP and PP is that while PP is forfood grains only, MSP is for 24 crops which includes both food grains and non-food grains.

Method of Calculation

• In formulating the recommendations in respect of the level of minimum support prices and other non-price measures, the CACP takes into account a comprehensive view of the entire structure of the economy of a particular commodity or group of commodities.
• Other Factors include cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect on cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy.
• The Commission makes use of both micro-level data and aggregates at the level of district, state and the country.

Supply related information – area, yield and production, imports, exports and domestic availability and stocks with the Government/public agencies or industry, cost of processing of agricultural products, cost of marketing – storage, transportation, processing, marketing services, taxes/fees and margins retained by market functionaries; etc. are also factored in.

Report of National Commission for Farmers (NCF) had recommended that MSP should be at least 50% more than the weighted average cost of production. However, this had not been accepted by the Government.
Procurement at MSP

• Farmers are made aware of the procurement operations by way of advertisements like displaying banners, pamphlets, announcement for procurement and specification in print and electronic media.
• Some States have taken steps to pre-register farmers for ensuring procurement from them through a software system.
• Keeping in view the procurement potential areas, procurement centres for MSP operations are opened by Government agencies, both Food Corporation of India (FCI) and State Government, after mutual consultations.

• Procurement centres are opened by respective State Govt. Agencies/ FCI taking into account the production, marketable surplus, convenience of farmers and availability of other logistics / infrastructure such as storage and transportation etc. Large number of temporary purchase centres in addition to the existing mandis and depots/godowns are also established at key points for the convenience of the farmers.
• The Govt. agencies also engage Co-operative Societies and Self Help Group which work as aggregators of produce from farmers and bring the produce to purchase centres being operated in particular locations/areas and increase outreach of MSP operations to small and marginal farmers. These Co-operative Societies are in addition to the direct purchases from farmers.
• Co-operative societies/Self Help Groups are engaged in many States like Bihar, Chhattisgarh, Odisha, Maharashtra, Karnataka, Jharkhand and Rajasthan. Whereas, in some states like Punjab and Haryana, the Government of India has permitted the State Governments to engage locals for procurement of food grains from the farmers on payment of commission. These steps have been taken by Government of India so that Govt. agencies can procure maximum food grains directly from farmers by expanding out- reach of MSP benefit to farmers.

• Food Corporation of India (FCI) is the designated central nodal agency for price support operations for cereals, pulses and oilseeds.

Since the grant of diwani for Bengal, Bihar and Orissa in 1765, the major concern of the East India Company’s administration in India was to collect as much revenue as possible. Agriculture was the main basis of economy and the main source of income and hence, although the nawabi administration was retained with Muhammad Reza Khan acting as the Naib Diwan for the Company, several land revenue experiments were introduced in haste to maximise extraction.

In 1772, Warren hastings  introduced a new system, known as the farming  system. European District Collectors, as the nomenclature suggested, were to be in charge of revenue collection, while the revenue collecting right was farmed out to the highest bidders. About the periodicity of the settlements, a number of experiments were made.

But the farming system ultimately failed to improve the situation, as the farmers tried to extract as much as possible without any concern for the production process. The burden of revenue demand on th peasants increased as a result and often it was so onerous that it could not be collected at all. The net outcome of this whole period of rash experimentation was the ruination of the agricultural population. In 1784, Lord Cornwallis was therefore sent to India with a specific mandate to streamline the revenue administration.

Up to 1793 A.D., The East India Company continued to follow the revenue farming system in Bengal Presidency. In 1782, Sir John Shore Committee was appointed to draft a new land revenue policy. The policy was approved by Michael Dundas, The President of Board of Control and William Pete the P.M. of England.

Permanent Settlement

The Permanent Settlement or Zamindari Sysem was introduced by Lord Corniwallis in 1793. In Bengal, North Cauvery Delta in Madras Presidency and Varanasi division. It covered altogether 19% of the total cultivable land under company rule.

Terms and Conditions of the System

• Zamindars were recognized as owner of the lands. Zamindars were given the rights to collect the rent from the peasants.
• The realized amount would be divided into 11 parts. 1/11 of the share belongs to Zamindars and 10/11 of the share belongs to East India Company.
• The Zamindars were also given Judicial powers
• The Sunset Law come into force in the event of Zamindars becoming defaulters.
• The system was introduced for a period of 10 years.

Effect of the system

• The effects of this system both on the zamindars and ryots were disastrous. As the revenue fixed by the system was too high, many zamindars defaulted on payments. Their property was seized and distress sales were conducted leading to their ruin. The rich zamindars who led luxurious lives left their villages and migrated into towns. They entrusted their rent collection to agents who exacted all kinds of illegal taxes besides the legal ones from the ryots.
• This had resulted in a great deal of misery amongst the peasants and farmers. Therefore Lord Cornwallis’ idea of building a system of benevolent land-lordism failed. Though initially the Company gained financially, in the long run the Company suffered financial loss because land productivity was high, income from it was meagre since it was a fixed sum. It should be noted that in pre- British period a share on the crop was fixed as land tax.

Ryotwari Settlement

The Ryotwari experiment was started by Alexander Reed in Baramahal in 1792 and was continued by Thomas Munro from 1801 when he was asked to take charge of the revenue administration of the Ceded Districts. Instead of zamindars they began to collect revenue directly from the village , fixing the amount each village had to pay. After this they proceeded to assess each cultivator or ryot separately and thus evolved the Ryotwari System. It created individual proprietary right in land, but it was vested in the peasants, rather than in the zamindars.

Effects of System

• It raised the revenue income of the government, but put the cultivators in great distress.
• In many areas no surveys were carried out and the tax of a ryot was assessed on an arbitrary basis, based on village accounts.
• The cultivating peasants were, therefore, gradually impoverished, and increasingly indebted and could not invest for the extension of cultivation.
• The Ryorwari system did not also eliminate village elites as inter mediaries between the government and the peasantry. As privileged rents and special rights of the mirasidars were recognised and caste privileges of the Brahmans respected.

Mahalwari System

Mahalwari system was introduced in 1833 during the period of William Bentick. It was introduced in Central Province, North-West Frontier, Agra, Punjab, Gangetic Valley, etc of British India.The Mahalwari system had many provisions of both the Zamindari System and Ryotwari System. In this system, the land was divided into Mahals. Each Mahal comprises one or more villages. Ownership rights were vested with the peasants. The villages committee was held responsible for collection of the taxes.

Effects of the Land Revenue Policy

• Land become a Commodity for the first time in Indian history
• Property rights in the land created for first time
• New rural classes were formed- The absentee landlords, money lenders and age earning working class.
• Commercialisation of agriculture encouraged. As a result , shortage of food crops took place causing famines. The 1832 Ganjan famine(Orissa) and 1875 deccan famine were the worst famines.
• The revenue policy was the single most important cause for all the major civilian rebellions in modern India, against the British.

Conventional and Non Conventional Sources of Energy

Main Sources of Energy:

The sources of energy are of following types:

1. Conventional Sources of Energy:

These sources of energy are also called non renewable sources. These sources of energy are in limited quantity except hydro-electric power.

(a) Coal and Lignite:

Coal is the major source of energy. Coal deposits in India are 148790 million tonnes. Total lignite reserves found at Neyveli are 3300 million tonnes. In 1950-51, annual production of coal was 32 million tonnes. In 2005-06, annual production of coal was 343 million tonnes.

Lignite production was 20.44 million tonnes in 2005-06. According to an estimate, coal reserves in India would last about 130 years. India is now the fourth largest coal producing country in the world. Coal deposits are mainly found in Orissa, Bihar, Bengal and Madhya Pradesh. It provides employment to 7 lakh workers.

(b) Oil and Natural Gas:

In India it is found in upper Assam, Mumbai High and in Gujarat. The resources of oil are small in India.

In 1950-51, the total production of oil in India was 0.3 million tonnes. It increased to 32.4 million tonnes in 2000-01. Despite tremendous increase in oil production.India still imports 70% of has oil requirements from abroad. In 1951, there was only one oil refinery in Assam.

After independence 13 such refineries were set up in public sector and their refining capacity was 604 lakh tonnes. After implementation of economic reforms, private refineries are also engaged in oil refining. As per current rate of consumption, oil reserves in India may last about 20 to 25 years.

Electricity

There are three main sources of power generation:

1. Thermal Power
2. Hydro-electric power
3. Nuclear Power
4. Thermal Power:

It is generated in India at various power stations with the help of coal and oil. It has been a major source of electric power. In 2004-05, its share in total installed capacity was 70 percent.

2. Hydro electric Power:

It is produced by constructing dams over overflowing rivers. For example BhakraNangal Project, Damodor Valley Project and Hirakund Project etc. In 1950-51, installed capacity of hydro-electricity was 587.4 MW and in 2004-05, it was 19600 MW.

3. Nuclear Power:

India has also developed nuclear power. Nuclear Power plants use uranium as fuel. This fuel is cheaper than coal. India has nuclear power plants at Tarapur, Kota (Rajasthan) Kalapakam (Chennai) Naroura (UP). Its supply accounts for only 3 percent of the total installed capacity.

POWER FROM NON CONVENTIONAL ENERGY

India is one of the fastest growing countries in terms of energy consumption. Currently, it is the fifth largest consumer of energy in the world, and will be the third largest by 2030. At the same time; the country is heavily dependent on fossil sources of energy for most of its demand. This has necessitated the country to start aggressively pursuing alternative energy sources – solar, wind, biofuels, small hydro and more.

1. Wind Energy

India‘s wind power potential has been assessed at 48500 MW. The current technical potential is estimated at about 13 000 MW, assuming 20% grid penetration, which would increase with the augmentation of grid capacity in potential states. The state-wise gross and technical potentials are given below India is implementing the world’s largest wind resource assessment program comprising wind monitoring, wind mapping and complex terrain projects.

1. Hydro Energy

Hydro power is the largest renewable energy resource being used for the generation of electricity. The 50,000 MW hydro initiatives have been already launched and are being vigorously pursued with DPRs for projects of 33,000 MW capacity already under preparation. Harnessing hydro potential speedily will also facilitate economic development of States, particularly North-Eastern States, Sikkim, Uttaranchal, Himachal Pradesh and J&K, since a large proportion of our hydro power potential islocated in these States. In India, hydro power projects with a station capacity of up to 25 megawatt (MW) each fall under the category of small hydro power (SHP).

1. Solar Energy

India is a solar rich country. India is a country near the equator – which means that given its geographical location, it is subject to a large amount of solar radiation throughout the year. India is also, according to area, the 7th largest country in the world.

The average solar radiation received by most parts of India range from about 4 to 7 kilowatt hours per meter square per day, with about 250-300 sunny days in a year. As can be seen from the solar radiation map above, the highest annual solar radiation is received by Rajasthan (desert area) and the lowest by the North eastern states of India.

1. Biomass energy

Globally, India is in the fourth position in generating power through biomass and with a huge potential, is poised to become a world leader in the utilization of biomass. Biomass power projects with an aggregate capacity of 773.3 MW through over 100 projects have been installed in the country. For the last 15 years, biomass power has become an industry attracting annual investment of over Rs. 1,000 billion, generating more than 09 billion unit of electricity per year. More than 540 million tons of crop and plantation residues are produced every year in India and a large portion is either wasted, or used inefficiently.

69. E) Energy from Wastes: The rising piles of garbage in urban areas caused by rapid urbanization and industrialization throughout India represent another source of nonconventional energy. An estimated 50 million tones of solid waste and approximately 6,000 million cubic meters of liquid waste are generated annually in the urban areas of India. Good potential exists for generating approximately 2,600 MW of power from urban and municipal wastes and approximately 1,300 MW from industrial wastes in India. A total of 48 projects with aggregate capacity of about 69.62 MWeq have been installed in the country thereby utilising only 1.8% of the potential that exists.
70. F) Biofuels: The GOI recently mandated the blending of 10 percent fuel ethanol in 90 percent gasoline. This mandate as created an approximately 3.6 billionliter demand for fuel ethanol in blend mandate to the entire country. This significant demand growth creates a tremendous manufacturing opportunity for the fuel ethanol industry seeking to expand its investments internationally