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In 1965, with the support of the World Bank, the government established the Food Corporation of India (FCI) which was responsible for the role of procuring, storing, and distributing foodstuff. Another body, the Agriculture Prices Commission (APC), [whose terms were revised and later renamed as the Commission for Agriculture Costs and Prices (CACP)] was also set up with WB's assistance. The CACP is responsible for fixing the MSP for 24 commodities and Statutory Minimum Price (SMP) for sugarcane. Farmers are given a set price for their produce that ensures production costs are covered.
From 1991 onwards, the World Bank's policies towards pricing and procurement began changing and it began recommending scrapping of the MSP and procurement by FCI, twin support mechanisms for farmers that the WB itself had help set up. Instead it recommended that private players ought to be allowed to procure directly from farmers and the rate be determined by the market. The trend toward privatization has increased steadily since this time which has directly led to the current crisis in Indian Agriculture.
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Agricultural Research and Extension in India
