Lok Sabha Question No. 2896 (UNSTARRED), answered on 2018-03-13
Subject: Minimum Support Price
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: RAKESH SINGH, BHAIRON PRASAD MISHRA

O.I.H

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION AND FARMERS WELFARE

## LOK  SABHA UNSTARRED QUESTION NO. 2896

TO BE ANSWERED ON THE 13 TH  March, 2018

## MINIMUM SUPPORT PRICE

2896.     SHRI RAKESH SINGH:

SHRI BHAIRON PRASAD MISHRA:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether  the  Government  proposes  to  increase  the  Minimum  Support  Price  for  Kharif crops by 1.5 times of the cost price, if so, the details thereof;
- (b) whether the Government proposes to include tail of farmers along with the expenditure incurred in crops as input cost and if so, the details thereof;
- (c) whether the formula being used in determining MSP are different leading to difficulties in calculation of actual cost;
- (d) if so, the details thereof; and
- (e) whether the Government has taken any measures to tackle the anomaly in the interest of farmers?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI  GAJENDRA SINGH SHEKHAWAT)

(a) & (b): Government fixes the Minimum  Support Prices (MSPs) of 22 mandated agricultural crops for 2017-18 on the basis of recommendations of Commission for Agricultural Costs and Prices (CACP). Out of 22 mandated crops (14 kharif crops, 6 rabi crops, copra and jute), the MSPs fixed by the Government for 2017-18 for 3 kharif crops viz. bajra, tur and urad; 5 rabi crops viz. wheat, barley, gram, masur and rapeseed/mustard; and jute provide returns of more than 50% over weighted average cost of production (A2+FL).

The  Union  Budget  for  2018-19  has  announced  the  pre-determined  principle  to  keep MSPs at levels of one and half time the cost of production for kharif crops also in the lines of that already implemented for rabi crops in October 2017.

Cost  of  production  is  one  of  the  important  factors  taken  into  account  by  CACP  in recommending  the  MSPs.  The  estimates  of  cost  of  cultivation/cost  of  production  are  made available to the CACP through the Comprehensive Scheme for Studying the Cost of Cultivation of  Principal  Crops,  operated  by  Directorate  of  Economics  and  Statistics,  Department  of Agriculture,  Cooperation  &  Farmers  Welfare,  Ministry  of  Agriculture  &  Farmers  Welfare, Government of India. These data are collected with the help of State Agricultural Universities (SAUs)/Institutions located in various states. The CACP uses all-India weighted average cost of production (A2+FL) in recommending MSPs.

(c) & (d): The  CACP  takes  into  account  the  cost  of  production,  overall  demand-supply conditions,  domestic  and  international  prices,  inter-crop  price  parity,  terms  of  trade  between agricultural  and non-agricultural sectors, the likely effect  on the rest of  the economy, besides ensuring  rational  utilization  of  productive  resources  like  land  and  water  while  recommending MSPs.  The MSPs recommended by CACP considers all paid out costs, which includes those incurred  on  account  of  hired  human  labour,  bullock  labour/machine  labour  and  rent  paid  for leased  in  land,  expenses  on  use  of  material  inputs  like  seeds,  fertilizers,  manures,  irrigation charges  including  cost  of  diesel/electricity  for  operation  of  pump  sets  and  imputed  value  of wages of family labour and depreciation of farm machinery & building. Cost of production varies in  different  States  on  account  of  difference  in  levels  of  irrigation,  resource  endowment,  farm mechanization, land holding size, yield of crops etc. CACP uses all India weighted average cost of production while making its recommendations on MSP and recommends uniform MSP which is applicable for all States. Even though there is variation in cost of production among States, the  MSP  fixed  by  Central  Government  for  2017-18  season  provides  adequate  returns  over weighted average cost of production(A2+FL).

(e): Government has taken several initiatives to raise the levels of productivity, production and  thereby  the  income  of  farmers  which  include  National  Food  Security  Mission  (NFSM), Rashtriya Krishi Vikas Yojana (RKVY), Soil Health Cards (SHC), Pradhan Mantri Krishi Sinchai Yojana  (PMKSY),  Pradhan  Mantri  Fasal  Bima  Yojana  (PMFBY),  Paramparagat  Krishi  Vikas Yojana  (PKVY),  National  Mission  for  Sustainable  Agriculture  (NMSA),  e-National  Agriculture Market (e-NAM), Farmer Producer Organization (FPOs), New Model Agricultural produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 and a Committee of the Government has been set up to frame policies for doubling the farmer's income by 2022.

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