Lok Sabha Question No. 133 (STARRED), answered on 2019-02-12
Subject: Price Realization by Farmers
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: HARI BABU KAMBHAMPATI

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

## LOK  SABHA STARRED QUESTION NO. 133

TO BE ANSWERED ON THE 12 TH  FEBRUARY, 2019

## PRICE REALIZATION BY FARMERS

- *133.     DR. KAMBHAMPATI HARIBABU:

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

- (a) whether the Government has conducted any study to determine the causes for lower price  realization  by  farmers  for  various  crops  like  onion,  brinjal,  etc.  and  if  so,  the  details thereof;
- (b) the details of the steps considered to be taken to address the issue of very low price realization for different food crops;
- (c) the extent to which the Price Stabilization Fund has fulfilled its mandate in reducing distress selling of agricultural crops; and
- (d) whether  the  Government  is  considering  formation  of  a  permanent  commission  to provide remedial measures and real time assistance during distress sale and if so, the details thereof?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी

(SHRI RADHA MOHAN SINGH)

- (a) to (d): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  LOK  SABHA STARRED QUESTION NO.  133   DUE FOR REPLY ON 12 TH  FEBRUARY, 2019.

(a) & (b): The  prices  of  agricultural  produce  are  determined  by  supply  and  demand conditions in the market on a day-to-day basis. The prices of agricultural produce tend to fall  immediately  after  harvest  due to  increase  in  market  arrival  of  new  crops  in  a  lumpy manner. The Indian Council of Agricultural Research (ICAR) has analysed the causes for lower  price  realization  by  farmers  for  onions.  The  Policy  Paper  on  'Understanding  the Recurring Onion Price Shocks' covered all the dimensions of onion price volatility. Onion crop has received greater attention because of extreme price volatility. In case of extreme price rise, the farmers shift the area under cultivation of onion from other competing crops. Such decisions  lead  to  glut  in  the  next  season  and  farmers  sometimes  are  not  able  to recover even the cost of production. The Budget for 2018-19 had indicated the importance of better price realization by farmers through the development of appropriate policies and practices for price and demand forecast and thereby inform the farmers' decision on crop choice.

To ensure remunerative prices, as per the existing arrangements, procurement is made of the crops for which MSPs are announced through Central and State agencies.  In so far as cereals/nutri cereals are concerned, they are procured through Food Corporation of  India  (FCI)  and  decentralized  procurement  system  mainly  for  distribution  under  the public distribution system (PDS), for welfare schemes and buffer stocking for food security. Government implements Price Support Scheme (PSS) for procurement of oilseeds, pulses and  cotton  through  Central  Nodal  Agencies  at  MSP  declared  by  the  Government.  This scheme is implemented at the request of the state government concerned which agrees to exempt the procured commodities from levy of mandi tax and   other state duties.  The basic objectives of PSS are to provide remunerative prices to the growers for their produce

-2- with a view to encourage higher investment and production and to safeguard the interest of  the  consumers  by  making  available  supplies  at  reasonable  price  with  low  cost  of intermediation.

Government is implementing Market Intervention Scheme (MIS) for procurement of agricultural  and  horticultural  commodities  which  are  perishable  in  nature  and  are  not covered under the Price Support Scheme (PSS). The objective of intervention is to protect the growers of these commodities from making distress sale in the event of a bumper crop during the peak arrival period when the prices tend to fall below economic levels and cost of  production.  In  pursuance  to  budget  announcement  for  the  year  2018-19,  Ministry  of Food  Processing Industries (MoFPI) has launched a new  central sector  scheme 'Operation Greens - A scheme for integrated development of Tomato, Onion and Potato (TOP) value chain' with a budgetary provision of Rs. 500 crore spread over 2018-19 and 2019-20 with allocation of Rs. 200 crore and Rs. 300 crore respectively.

The recently launched Umbrella Scheme 'Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA) provides for a holistic arrangement for assurance of a remunerative  and  stable  price  environment  for  growers  /farmers  to  increase  agriculture production  and  productivity.  This  umbrella  Scheme  comprises  Price  Support  Scheme (PSS)  for  pulses  &  oilseeds,  Price  Deficiency  Payment  Scheme  (PDPS)  and  Pilot  of Private  Procurement  &  Stockist  Scheme  (PPSS)  for  oilseeds  to  ensure  MSP  to  the farmers.

(c):        Government set up the price stabilization fund (PSF) for the first time in 2014-15 with the objective of protecting consumers from excessive price volatility in agricultural & horticultural   commodities   like onion,   potatoes and pulses.  The PSF was set up with an

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Initial   Corpus  of  Rs. 500 crore.   Till 2017-18, a   corpus of Rs. 11,110 crore was created through budget. An additional allocation of Rs. 1,500 crore has been made to the Fund in the  budget  of  2018-19.  The  PSF  is  for  procurement  of  agricultural  &    horticultural commodities to enable supply, at reasonable prices, through calibrated release of stock. In doing  so,  it  also  seeks  to  benefit  farmers  by  promoting  direct  purchase  of  these commodities at the farm gate and mandis, thus extending remunerative prices to farmers. Interest free advances  is  provided  from the PSF  to  Central  Agencies  and  state governments towards working capital for procurement of pulses and perishable agricultural & horticultural commodities. About, 1.82 lakh metric tonnes of pulses is available presently in  the  buffer  after  disposal  of  18.68  lakh  metric  tonnes  from  the  stock  of    20.50  lakh tonnes. About 16.71 lakh tonnes out of 20.50 lakh tonnes was procured domestically, of which 15.52 lakh tonnes was procured from Kharif Marketing Season 2016-17 and Rabi Marketing Season 2017-18 benefiting around 8,49,128 farmers.

(d): No  Madam,  there  is  no  specific  proposal  in  this  regard.  However,  apart  from increasing MSPs, Government has taken several steps to ensure remunerative prices to farmers for their produce which include     implementing e-National  Agriculture   Market (e-NAM), enacting the Model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 and promoting Farmer Producer Organizations (FPOs). In the Union Budget,  2018-19  it  was  announced  that  Government  will  develop  and  upgrade  existing 22,000  rural  haats  into  Gramin  Agricultural  Markets  (GrAMs).  In  these  GrAMs,  physical infrastructure  will  be  strengthened  using  MGNREGA  and  other  Government  Schemes. These GrAMs,   electronically linked to e-NAM  and exempted from regulations of APMCs,

will  provide  farmers  facility  to  make  direct  sale  to  consumers  and  bulk  purchasers. Further, an Agri-Market Infrastructure Fund with a corpus of Rs. 2000 crore will be set up for developing and upgrading agricultural marketing infrastructure in the 22000 Grameen Agricultural Markets (GrAMs) and 585 APMCs.

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