Lok Sabha Question No. 14 (UNSTARRED), answered on 2018-12-11
Subject: Hike in MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: SISIR KUMAR ADHIKARI

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

## LOK  SABHA

## UNSTARRED QUESTION NO. 14

TO BE ANSWERED ON THE 11 TH  DECEMBER, 2018

## HIKE IN MSP

## 14. SHRI SISIR KUMAR ADHIKARI:

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

- (a) whether the Government has announced a 50 per cent hike in MSP for crops to boost up farmer's income;
- (b) if so, the items on which the Government compensates farmers with fair and remunerative prices thereof;
- (c) whether  the  Government  has  released  MSP  to  solve  the  distress  of  the  farmers  of  the country during the last six months period;
- (d) if  so,  the details of the report thereof along with the details of MSP paid and the average production costs of crops, State-wise; and
- (e) the time by which the incentives will go to all the beneficiaries of the country?

## 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) to (c): Government  fixes  Minimum  Support  Prices  (MSPs)  of  22  mandated  agricultural crops and Fair & Remunerative Price (FRP) for Sugarcane on the basis of recommendations of Commission  for  Agricultural  Costs  &  Prices  (CACP),  after  considering  the  views  of  State Governments  and  Central  Ministries/Departments  concerned  and  other  relevant  factors.  In addition,  MSP  for  Toria  and  De-Husked  coconut  is  also  fixed  on  the  basis  of  MSPs  of Rapeseed/Mustard and Copra respectively. The Union Budget for 2018-19 had announced the predetermined principle to keep MSPs at levels of one and half times the cost of production for all mandated crops. Accordingly, Government has increased MSPs for all mandated agricultural crops for the season 2018-19 . Details of cost, MSP and percent return over cost for the year 2017-18 & 2018-19  is  at  Annexure  I.  This  decision  of  the  Government  was  a  historic  one  as  it  fulfills  the commitment to the farmers to provide 50 per cent return over cost of production for the first time.

Government is committed to farmers welfare and towards this objective it has changed its strategy from being production centric to an income centric one. The above MSP policy is another progressive step forward in a series of reforms that the Government has been rolling out for the last  4  years,  committed  as  it  is  to  doubling  farmers'  income  by  2022  and  improving  the  welfare substantively.

(d) & (e): Region specific parameters are kept in view by the CACP while recommending MSP for  agricultural  crops.    Since  the  cost  of  production  varies  in  different  States  on  account  of differences in levels of irrigation, resource endowment, farm mechanization, land holding size etc., CACP uses all-India weighted average cost of production while making its recommendations and recommends uniform MSP which is applicable to all states. Details of State-wise cost of production for  the  year  2018-19  is  given  at  Annexure  II.  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 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.     A n ew   Umbrella   Scheme 'Pradhan  Mantri  Annadata  Aay SanraksHan Abhiyan'  (PM-AASHA)  has  been  announced  by  the  government.  The  scheme consists  of  three  sub-schemes  i.e.  Price  Support  Scheme  (PSS),  Price  Deficiency  Payment Scheme (PDPS) and Private Procurement & Stockist Scheme (PPSS) on a pilot basis.

The  payments  to  the  farmers  are  made  through  Real  Time  Gross  settlement  (RTGS)/ National Electronic Fund Transfer (NEFT) and account payee cheque by the procuring agencies. However, if producer/farmers gets better price in comparison to MSP, they are free to sell their produce in open market.

## Annexure referred to in reply to part (a) to (c) of Lok Sabha Unstarred Question No.14 due for reply on 11.12.2018.

## Cost*, Minimum Support Price (MSP) & percent return over cost

(Rs/Qtl)

| Sl.   | Commodity              | 2017-18   | 2017-18   | 2017-18           | 2018-19   | 2018-19   | 2018-19           |
|-------|------------------------|-----------|-----------|-------------------|-----------|-----------|-------------------|
| No.   | KHARIF CROPS           | Cost      | MSP       | %Return over cost | Cost      | MSP       | %Return over cost |
| 1     | PADDY(Common)          | 1117      | 1550      | 38.8              | 1166      | 1750      | 50.1              |
| 2     | JOWAR (Hybrid)         | 1556      | 1700      | 9.3               | 1619      | 2430      | 50.1              |
| 3     | BAJRA                  | 949       | 1425      | 50.2              | 990       | 1950      | 97.0              |
| 4     | MAIZE                  | 1044      | 1425      | 36.5              | 1131      | 1700      | 50.3              |
| 5     | RAGI                   | 1861      | 1900      | 2.1               | 1931      | 2897      | 50.0              |
| 6     | ARHAR(Tur)             | 3318      | 5450      | 64.3              | 3432      | 5675      | 65.4              |
| 7     | MOONG                  | 4286      | 5575      | 30.1              | 4650      | 6975      | 50.0              |
| 8     | URAD                   | 3265      | 5400      | 65.4              | 3438      | 5600      | 62.9              |
| 9     | COTTON (Medium Staple) | 3276      | 4020      | 22.7              | 3433      | 5150      | 50.0              |
| 10    | GROUNDNUT IN SHELL     | 3159      | 4450      | 40.9              | 3260      | 4890      | 50.0              |
| 11    | SUNFLOWER SEED         | 3481      | 4100      | 17.8              | 3592      | 5388      | 50.0              |
| 12    | SOYABEEN               | 2121      | 3050      | 43.8              | 2266      | 3399      | 50.0              |
| 13    | SESAMUM                | 4067      | 5300      | 30.3              | 4166      | 6249      | 50.0              |
| 14    | NIGERSEED              | 3912      | 4050      | 3.5               | 3918      | 5877      | 50.0              |
|       | RABI CROPS             |           |           |                   |           |           |                   |
| 1     | WHEAT                  | 817       | 1735      | 112.4             | 866       | 1840      | 112.5             |
| 2     | BARLEY                 | 845       | 1410      | 66.9              | 860       | 1440      | 67.4              |
| 3     | GRAM                   | 2461      | 4400      | 78.8              | 2637      | 4620      | 75.2              |
| 4     | MASUR (LENTIL)         | 2366      | 4250      | 79.6              | 2532      | 4475      | 76.7              |
| 5     | RAPESEED/MUSTARD       | 2123      | 4000      | 88.4              | 2212      | 4200      | 89.9              |
| 6     | SAFFLOWER              | 3125      | 4100      | 31.2              | 3294      | 4945      | 50.1              |
|       | OTHER CROPS            |           |           |                   |           |           |                   |
| 1     | COPRA (Milling)        | 4758      | 6500      | 36.6              | 5007      | 7511      | 50.0              |
| 2     | JUTE                   | 2160      | 3500      | 62.0              | 2267      | 3700      | 63.2              |
| 3     | SUGARCANE#             | 152       | 255       | 67.8              | 155       | 275       | 77.4              |

## Annexure-II

Annexure referred to in reply to part (d)&(e) of Lok Sabha Unstarred Question No. 14 due for reply on 11.12.2018

| Year   |
|--------|

Source: CACP

* 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, depreciation on  implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc, miscellaneous expenses and imputed value of family labour.

**********