POINTS RELATED TO #MSP

1) MSP does not have any legal backing till now and farmers can't demand it as a right. Its just government policy and an administrative decision to purchase food grains at MSP. And govt can't even force private players to provide MSP. 👇

And even the new Farm Bills does not mention "MSP" or " government procurement".

CACP, which recommends MSP, is again not a statutory body and its just an office attached to Ministry of Agriculture. CACP just recommends MSP but the decision on fixing and even not fixing 👇
and its implementation lies with Govt.

See there are two things, ONE is declaration of MSP and the SECOND is procurement of food grains at MSP by Govt. Agencies. The declaration of MSP has no meaning (its worthless) if Govt. agencies are not procuring at MSP. 👇
Govt. declares MSP for 25 crops but procurement mainly happens only of Wheat and Rice from Punjab and Haryana. Its practically impossible to purchase the entire 25 crops from all over India at MSP. And there is whole lot of CORRUPTION in FCI MSP operations and govt. 👇
is loosing lakhs of crores of rupees every year in subsidy, not resulting in any benefit to poor but helping only few big farmers. THAT IS WHY GOVT. don't want MSP to make a LEGAL RIGHT.

2) Why farmers are scared about the agri reforms???👇
Answer: Farmers see these reforms as a precursor to dismantling MSP mechanism. And that may be TRUE. Let me tell u why.
Procurement at MSP of only wheat and rice from Punjab and Haryana has totally distorted agriculture production, resulting in Soil degradation👇
, water contamination (with urea), stagnated yield etc. But govt cannot stop MSP procurement immediately as farmers will suffer a lot, this is because, as wholesale trade was not allowed outside APMCs, so private mandi infrastructure have not developed in India. 👇
If govt will not procure at MSP, the trades in APMC mandis will exploit farmers (as they are exploiting farmers all over India) as there are no other mandis for farmers to sell. So, by bringing in reforms govt wants to establish several private mandis and in future 👇
once all this private marketing infrastructure gets developed, then in future if govt stops procurement at MSP..............then farmers will have the choice to sell outside APMC mandis and they may even fetch better or equal price as MSP........ 👇
3) National Food Security Act 2013 say about providing wheat/rice/coarse grains to people through PDS but does not talk about procurement at MSP.

4) The Essential Commodities Act 1955 mentions sugarcane and sugar as essential commodities and through that Act, 👇
govt has forced private players/sugar mills to procure sugarcane from farmers at FRP/SAP.

5) Its like Central govt and State govt combined is giving more than Rs. 3 lakh crore every year as subsidy to farmers like MSP, urea, electricity, water, purchase of equipments etc. etc👇
which is mainly consumed by few big farmers because 86% of the small and marginal farmers practically dont benefit. These big farmers have acres of land. Even a farmer having 5 acre of land converts into an asset size of more than one crore value. 👇
To them Govt has to give a lot of subsidies every year and what about the landless labourers, daily wagers ?????? they dont have any asset and they dont get any subsidy.

Explained by Vivek singh:Economist

I am not against farmer.🙏🙏 Just sharing some facts.
@ABHIJEETBHAIP @abey_satya @rautsavi9 @arvindgj @NANASAHEB_Y @Nastik_Shubham @Shrirekha27 @SandipLondhe07 @Pnayan3 @AnkitaTawade3 @Me_sonubhosale

More from Finance

Ok here is the explanation. Grab a cup of coffee and read on. If you have not read/noticed this, you will see intraday options movement in a new light.


Say we have two options, one 50 delta ATM options and another 30 delta OTM option. Normally for a 100 point move, the ATM option will move 50 points and the OTM option will move 30 points. But in a high volatile environment, the OTM option will also move nearly 50 points

To understand why this happens, first understand why an ATM option is 50 delta. An ATM option has the probability of 50% of expiring as ITM. The price just has to close a rupee above the strike for the CE to be ITM and vice versa for PEs

Now think of a highly volatile day like today. If someone is asked where the BNF will close for the day or expiry, no one can answer. BNF can close freakin anywhere, That makes every option of an equal probability of being ITM. So all options have a 50% probability of being ITM

Hence, when a huge volatile move starts, all OTM options behave like ATM options. This phenomenon was first observed in the Black Monday crash of 1987 at Wall Street, which also gave rise to the volatility skew/smirk

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