SYLLABUS
GS-3: Issues related to direct and indirect farm subsidies and minimum support prices.
Context: Recently, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, approved an increase in the Minimum Support Price (MSP) for copra for the 2026 season.
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• For the 2026 season, MSP has been fixed at ₹12,027 per quintal for Fair Average Quality milling copra and ₹12,500 per quintal for ball copra, reflecting an increase of ₹445 and ₹400 per quintal.
• Since 2014, MSP has risen from ₹5,250 to ₹12,027 for milling copra and from ₹5,500 to ₹12,500 for ball copra, registering growth of 129% and 127%, respectively.
• National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National Cooperative Consumers’ Federation (NCCF) will continue to act as Central Nodal Agencies (CNAs) for the procurement of copra under Price Support Scheme (PSS).
- NAFED is a government-backed cooperative that promotes the marketing of agricultural produce in India, established on 2nd October 1958.
- NCCF was established on 16th October 1965 to function as the apex body of consumer cooperatives in the country.
• This move will ensure better returns for coconut growers and encourage increased copra production to meet rising domestic and international demand.
• The increase in MSP is in line with the Government’s announcement in the Union Budget 2018–19 that MSP for all mandated crops would be fixed at a minimum of 1.5 times the all-India weighted average cost of production.
About Copra
• Copra is the dried meat or kernel of the coconut, harvested from the mature fruit of the coconut palm (Cocos nucifera).
• Copra is valued for the coconut oil extracted from it and for the resulting residue, coconut-oil cake, which is used mostly for livestock feed.
• India produces two types of copra: milling copra, used for oil extraction, and ball/edible copra, consumed as a dry fruit or for religious purposes.
• According to the Coconut Development Board (CDB), 45.8% of total coconut production went into copra, 33% milling and 12.8% ball copra in 2022-23.
- CDB is a statutory body established on 12 January 1981. It operates under the Ministry of Agriculture and Farmers Welfare, with headquarters in Kochi, Kerala.
• As of 2023, India is the world’s third-largest coconut producer (after the Philippines and Indonesia), contributing 31.45% of global output with 21,373.62 million nuts in FY24.
• The crop contributes around Rs. 30,795.6 crore (US$ 3.72 billion) to the country’s gross domestic product (GDP) during FY23.
• In FY 2023-24, Karnataka led coconut production with 6,151 million nuts, followed by Tamil Nadu at 6,092 million and Kerala at 5,522 million.
• World Coconut Day is observed on 2nd September each year, marking the 1969 founding of the International Coconut Community (ICC), an intergovernmental body under the United Nations Economic and Social Commission for Asia and the Pacific( UNESCAP).
- India is a founder member of the ICC.
MSP Regime of India
• The Minimum Support Price (MSP) is a form of market intervention by the Government to protect agricultural producers against any sharp fall in farm prices.
• MSPs are announced by the Cabinet Committee on Economic Affairs (CCEA) at the beginning of the sowing season for certain crops (currently 23) based on the recommendations of the Commission for Agricultural Costs and Prices (CACP).
• The list of crops is as follows:
- Cereals (7) – paddy, wheat, maize, jowar (sorghum), bajra (pearl millet), barley and ragi
- Pulses (5) – gram, tur, moong, urad, masur (lentil)
- Oilseeds (7) – groundnut, rapeseed-mustard (+ toria), soyabean, sesamum, sunflower, safflower, nigerseed
- Commercial crops (4) – copra (+ de-husked coconut), sugarcane, cotton and raw jute.
Source:
PIB
Coconut Community
Agritech.Tnau
Ibef
PIB
Nafed-India
Nccf-India