Lok Sabha Question No. 622 (UNSTARRED), answered on 2017-12-19
Subject: MSP for Agricultural Produce
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: HARIOM SINGH RATHORE, SATYA PAL SINGH, KAMLA DEVI PATLE, NAGENDRA KUMAR PRADHAN

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

## LOK  SABHA UNSTARRED QUESTION NO.622

TO BE ANSWERED ON THE 19 TH   DECEMBER, 2017

## MSP FOR AGRICULTURAL PRODUCE

622.   SHRI HARIOM SINGH RATHORE: SHRI SATYAPAL SINGH: SHRIMATI KAMLA DEVI PAATLE: SHRI NAGENDRA KUMAR PRADHAN:

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

- (a) whether there is any institutional mechanism in place for deciding minimum support price for agricultural produce (items);
- (b) if so, the details thereof and the criteria fixed for deciding minimum support price;
- (c) whether  the  Government  takes  into  account  the  increasing  cost  of  agriculture  inputs including  price  of  land,  cost  of  cultivation,  irrigation,  farmers  labour  before  deciding  on  the minimum support price of agricultural produce and if so, the details thereof;
- (d)  whether  the  farmers'  organisations  and  farmer  representatives  are  consulted  while  fixing minimum support prices of crops, if so, the details thereof;
- (e) whether  the  Government  proposes  to  increase  the  minimum  support  price  for  various agricultural produces and if so, the details thereof;
- (f) whether the minimum support price for paddy is likely to be fixed by the Government at Rupees twenty five hundred per quintal this year, if so, the details thereof and if not, the reasons therefor; and
- (g) the various steps taken by the Government to provide adequate remunerative prices to 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): The Commission for Agricultural Costs & Prices (CACP) is an attached office of the Ministry of Agriculture and Farmers Welfare, Government of India. It came into existence in January  1965  and  prior  to  1985  it  was  known  as  the  Agricultural  Prices  Commission.  It  is mandated to recommend Minimum Support Prices (MSPs) for major agricultural produce.

While  recommending  MSPs,  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.

(c): Cost of production is one of the important factors taken into account in fixing the MSPs. The cost of production (A2+FL) includes all paid out costs such as those incurred on account of hired  human  labour,  bullock  labour/machine  labour,  rent  paid  for  leased  in  land,  expenses incurred on use of material inputs like seeds, fertilizers, manures, irrigation charges, diesel/electricity for operation of pump sets etc. and imputed value of family labour.

(d): CACP holds consultations with  various stakeholders including  State  Governments  and farmers' organisations/representatives before finalizing its recommendations. Government fixes Minimum Support Prices (MSPs) for 22 major agricultural crops and Fair & Remunerative Price (FRP) for Sugarcane on the basis of the recommendations of the Commission for Agricultural Costs  &  Prices  (CACP),  after  obtaining  the  views  of  State  Governments  and  Central Ministries/Departments and other relevant factors.

(e): Government  has  increased  the  MSPs  of  various  agricultural  produces  for  2017-18 season. Details are at Annexure. There is no further proposal for this year in this regard.

(f): No.  Government  has  fixed  for  the  year  MSP  of  paddy  at  Rs.  1550  per  quintal  for common variety and Rs. 1590 per quintal for Grade 'A' variety for 2017-18. The MSP fixed by Government provides adequate returns of 38.8% for common variety and 42.3% for Grade 'A' variety over weighted average cost of production including family labour (A2+FL).

(g): Government  has  taken  several  steps  to  ensure  MSP  for  agricultural  produce  which interalia, includes setting up of procurement centres keeping in view the potential in the areas; creating  awareness  among  the  farmers  of  the  MSP  operations;  encouraging  decentralized procurement;  adopting  e-procurement  system;  engaging  private  players  in  certain  States  to participate  in  procurement  operations,  implementing  e-National  Agriculture  Market  (e-NAM), promoting Farmer Producer Organizations (FPOs) etc.

Government  also  implements  Market  Intervention  Scheme  (MIS)  for  procurement  of agricultural  and  horticultural  commodities  not  covered  under  the  MSP  on  the  request  of State/UT  Government.  The  MIS  is  implemented  in  order  to  protect  the  growers  of  these commodities from making distress sale in the event of bumper crop when the prices tend to fall below the economic level/cost of production. Losses, if any, incurred by the procuring agencies are shared by the Central Government and the concerned State Government on 50:50 basis (75:25 in case of North-Eastern States).

In addition, Government has taken several initiatives to increase agricultural production and  productivity  and  to  enhance  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),  Paramparagat  Krishi  Vikas  Yojana  (PKVY),  National Mission for Sustainable Agriculture (NMSA) and a Committee of the Government has been set up for recommending policies for doubling the farmers' income by 2022.

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## Annexure

## Annexure referred to in reply to part (e) of Lok Sabha Unstarred Question No. 622 due for reply on 19.12.2017.

## Minimum Support Prices (MSPs) and increase in MSP

(Rs. per quintal)

| Sl. No.   | Commodity                         | Variety       | 2016-17   | 2017-18   | (#) increase in MSP 2017-18 over 2016-17   |
|-----------|-----------------------------------|---------------|-----------|-----------|--------------------------------------------|
| 1         | PADDY                             | Common        | 1470      | 1550      | 80(5.4)                                    |
|           |                                   | Grade 'A'     | 1510      | 1590      | 80(5.3)                                    |
| 2         | JOWAR                             | Hybrid        | 1625      | 1700      | 75(4.6)                                    |
|           |                                   | Maldandi      | 1650      | 1725      | 75(4.5)                                    |
| 3         | BAJRA                             |               | 1330      | 1425      | 95(7.1)                                    |
| 4         | MAIZE                             |               | 1365      | 1425      | 60(4.3)                                    |
| 5         | RAGI                              |               | 1725      | 1900      | 175(10.1)                                  |
| 6         | ARHAR(Tur)                        |               | 5050^^    | 5450^     | 400(7.9)                                   |
| 7         | MOONG                             |               | 5225^^    | 5575^     | 350(6.7)                                   |
| 8         | URAD                              |               | 5000^^    | 5400^     | 400(8)                                     |
| 9         | COTTON                            | Medium Staple | 3860      | 4020      | 160(4.1)                                   |
|           |                                   | Long Staple   | 4160      | 4320      | 160(3.8)                                   |
| 10        | GROUNDNUT IN SHELL                |               | 4220*     | 4450^     | 230(5.5)                                   |
| 11        | SUNFLOWER SEED                    |               | 3950*     | 4100*     | 150(3.8)                                   |
| 12        | SOYABEEN                          |               | 2775*     | 3050^     | 275(9.9)                                   |
| 13        | SESAMUM                           |               | 5000^     | 5300*     | 300(6)                                     |
| 14        | NIGERSEED                         |               | 3825*     | 4050*     | 225(5.9)                                   |
|           | RABI CROPS                        |               |           |           |                                            |
| 15        | WHEAT                             |               | 1625      | 1735      | 110(6.8)                                   |
| 16        | BARLEY                            |               | 1325      | 1410      | 85(6.4)                                    |
| 17        | GRAM                              |               | 4000^     | 4400@     | 400(10.0)                                  |
| 18        | MASUR (LENTIL)                    |               | 3950@     | 4250*     | 300(7.6)                                   |
| 19        | RAPESEED/MUSTARD                  |               | 3700*     | 4000*     | 300(8.1)                                   |
| 20        | SAFFLOWER                         |               | 3700*     | 4100*     | 400(10.8)                                  |
| 21        | TORIA                             |               | 3560      |           |                                            |
|           | OTHER CROPS                       |               |           |           |                                            |
| 22        | COPRA                             | Milling       | 5950      | 6500      | 550(9.2)                                   |
|           | (Calender Year)                   | Ball          | 6240      | 6785      | 545(8.7)                                   |
| 23        | DE-HUSKED COCONUT (Calender Year) |               | 1600      | 1760      | 160(10)                                    |
| 24        | JUTE                              |               | 3200      | 3500      | 300(9.3)                                   |
| 25        | SUGARCANE$                        |               | 230.00    | 255       | 25(10.9)                                   |

- # Figures in brackets indicate percentage increase.
- $ Fair and remunerative price.
* Including Bonus of Rs. 100 per quintal.
- ^ Including Bonus of Rs. 200 per quintal.
- ^^ Including Bonus of Rs. 425 per quintal.
- @ Including Bonus of Rs. 150 per quintal