Lok Sabha Question No. 608 (UNSTARRED), answered on 2017-12-19
Subject: Rise in Cost of Agricultural Input
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: PRAHLAD SINGH PATEL

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

## LOK  SABHA UNSTARRED QUESTION NO.608

TO BE ANSWERED ON THE 19 TH   DECEMBER, 2017

## RISE IN COST OF AGRICULTURAL INPUT

## 608.   SHRI PRAHLAD SINGH PATEL:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be  pleased  to  state  whether  the  crash  in  prices  of  agricultural  output  and  the  rise  in  cost  of agricultural input have adversely affected the interests of all sections among the peasantry and if so, the details of the concrete steps taken by the Government in this regard?

## 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)

Market  prices  of  agricultural  commodities  periodically  exhibit  seasonal  and  cyclical  variations due to demand-supply mismatches.  To mitigate the risk of volatile market prices,. Government fixes  the  minimum  support  prices  (MSPs)  of  principal  crops    and  conducts  procurement operations.  The MSPs take into account all paid out costs and costs of family labour and seek to  offer  adequate  returns  over  weighted  average    cost.    One  way  to  look  at  the  relative movements in the prices received by the farmer and the prices for inputs paid is to analyse the Index of Terms of Trade (ITT) for agricultural sector and farmers.  The agriculture Sector index which  includes  farmers  and  labourers  has  remained  favourable  till  2016-17  while  the  ITT  for farmers has remained unfavourable till 2015-16 but turned out to be favourable in 2016-17.  The details are given below:

Index of Terms of Trade (ITT) (IPR/IPP*100)

## (Base TE 2011-12=100)

| Year       | Farmers   | Farmers   | Farmers   | Agriculture Sector   | Agriculture Sector   | Agriculture Sector   |
|------------|-----------|-----------|-----------|----------------------|----------------------|----------------------|
| Year       | IPR       | IPP       | ITT       | IPR                  | IPP                  | ITT                  |
| 2012-13    | 119.49    | 122.67    | 97.40     | 120.34               | 119.18               | 100.97               |
| 2013-14    | 131.67    | 133.55    | 98.60     | 132.85               | 126.98               | 104.62               |
| 2014-15    | 138.21    | 141.64    | 97.58     | 140.66               | 131.51               | 106.96               |
| 2015-16    | 142.78    | 147.26    | 96.96     | 145.30               | 136.10               | 106.76               |
| 2016-17(P) | 151.46    | 145.69    | 103.96    | 154.19               | 130.50               | 118.15               |

IPR-Index of Prices Received  IPP-Index of Prices Paid

For the perishable and horticultural commodities for which MSPs are not fixed, in order to protect  the  growers  from  distress  sales,  Government  implements  the  Market  Intervention Scheme (MIS) whereby procurement is made on the request of State Government.

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