Lok Sabha Question No. 4917 (UNSTARRED), answered on 2019-07-23
Subject: Increase in MSP for Kharif Crops
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Imtiaz Jaleel Syed, Asaduddin Owaisi, Dibyendu Adhikari

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

## LOK  SABHA UNSTARRED QUESTION NO.4917

TO BE ANSWERED ON THE 23 RD  JULY, 2019

## INCREASE IN MSP FOR KHARIF CROPS

4917.  SHRI SYED IMTIAZ JALEEL: SHRI ASADUDDIN OWAISI: SHRI DIBYENDU ADHIKARI:

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

- (a) whether it is a fact that cost of production of agriculture produce has increased manifold and if so, whether to give relief to farmers, the Government has increased MSP for more than 14 kharif crops;
- (b) if so, the details thereof and percentage increase in MSP for these produce;
- (c) the number of agricultural produce left whose MSP price have not been increased;
- (d) the  extent  to  which  this  step  of  the  Government  is  likely  to  give  relief  to  farmers  and impose a burden on consumers;
- (e) the further steps taken or being taken by the Ministry to encourage farmers to increase agricultural production especially in the drought situation;
- (f) whether the Government has made or is aware of any study to evaluate the impact of the MSP on rice cultivation in India; and
- (g) whether large parts of North India are facing excessive depletion of water affecting wheat and rice cultivation and if so, the steps taken by the Government to reserve water for cultivation thereof?

## ANSWER

MINISTER  OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी (SHRI NARENDRA SINGH TOMAR)

- (a) & (b):    On the recommendations of Commission for Agricultural Costs & Prices (CACP), Minimum Support Prices (MSPs) for 22 mandated  crops  are  announced by  the Government which includes 14 kharif crops.
- CACP uses all-India weighted average cost of production while making its recommendations. This cost of production is all comprehensive cost as projected by the CACP after factoring inflation of agricultural inputs.

The  Union  Budget  for  2018-19  had  announced  the  pre-determined  principle  to  keep minimum support prices (MSP) at a level of atleast one and half times of the cost of production. Accordingly, Government had increased MSPs for all mandated crops with a return of at least 50  percent  over  all  India  weighted  average  cost  of  production  for  the  season  2018-19. Government has recently increased the  MSPs for all kharif crops for 2019-20 season in line with the principle of providing at least 50 percent return over all India weighted average cost of production. Details of MSP, cost, return over cost and percent increase for 2018-19 and 201920 are given in Annexure I.

(c): These mandated MSP crops cover approximately 99 per cent of the total agricultural output (does not include horticulture) in the country. Government implements on the request of State/UT  Governments  concerned,  Market  Intervention  Scheme  (MIS)  for  horticultural  crops which are perishable in nature and some agricultural crops which are not covered under the MSP.

(d): Government generally increases MSPs of all mandated crops over their previous year's MSPs.  Higher  MSP  will  ensure  higher  returns/income  to  the  farmers.Higher  MSP  does  not necessarily  imply  a  proportionate  increase  in  the  market  price.  Price  depends  on,  among others,  demand  and  supply  conditions  and  even  as  MSPs  have  been  increased  inflation  in terms of these Consumer Price Index (CPI) have remained low and benign.

(e): Government has taken several initiatives to reduce the cost of production, raise the yield levels  and  provide  remunerative  price  to  farmers  which  include  Soil  Health  Card,  Pradhan Mantri  Krishi  Sinchai  Yojana(PMKSY),  neem-coated  urea(NCU),  bio  pesticides  for  promoting integrated pest management, production and supply of quality seeds, promoting water saving devices like sprinkler sets, drip irrigation system etc.

In addition, Progress of Monsoon and Area coverage etc. are monitored weekly through Crop and Weather Watch Group meetings as well as video conferencing, advising the States to take steps according to the prevailing situation. District Agriculture Contingency Plans for 648 districts have been prepared by Central Research Institute for Dry land Agriculture (CRIDA) to mitigate the situation in drought affected areas. There is a provision of distribution of seeds of contingency crops such as pulses, millets, oilseeds, which are drought hardy and survive with minimal available water in rain fed/ drought affected areas under National Food Security Mission (NFSM).

(f) & (g): The  NITI  Aayog  has  conducted  a  study  entitled  'Efficacy  of  minimum  support prices on farmers'. The study covered 14 States, 36 Districts, 72 Blocks, 144 Villages and 1440 Households. The study is based on both the primary and secondary data. The study reference period was from the year 2007-08 to 2010-11. The study has found that MSP declared by the Government  has  encouraged  78  %  of  the  farmers  covered  under  the  study  for  adopting improved  methods  of  farming  such  as  high  yielding  varieties  of  seeds,  organic  manure, chemical  fertilizer,  pesticides  and  improved  methods  of  harvesting  etc.  due  to  remunerative price.

Ground water levels in various parts of the country including North India are declining because  of continuous  withdrawal  due to  increased  demand  of fresh  water  for  various  uses, vagaries of rainfall, increased population, industrialization & urbanization etc.

Government has taken several steps, which among others, include  Crop Diversification Programme (CDP) in original green revolution states viz. Punjab, Haryana and Western Uttar Pradesh as a sub scheme of Rashtriya Krishi Vikas Yojana (RKVY) since 2013-14 to divert the area of water guzzling paddy crop to alternate crops like pulses, oilseeds, coarse/nutri-cereals, cotton and agro forestry.

## Annexure referred to in reply to part (a) & (b) of Lok Sabha Unstarred Question No. 4917 due for reply on 23.07.2019.

## Cost*, MSP and Return

(Rs. Per quintal)

| Sl. No.   | Commodity              | 2018-19   | 2018-19   | 2019-20   | 2019-20   | 2019-20            | 2019-20                                     |
|-----------|------------------------|-----------|-----------|-----------|-----------|--------------------|---------------------------------------------|
|           | KHARIF CROPS           | Cost*     | MSP       | Cost*     | MSP       | % Return over Cost | Percentage increase in 2019-20 over 2018-19 |
| 1         | PADDY(Common)          | 1166      | 1750      | 1208      | 1815      | 50.2               | 3.7                                         |
|           | (Grade A)^             |           | 1770      |           | 1835      |                    | 3.7                                         |
| 2         | JOWAR (Hybrid)         | 1619      | 2430      | 1698      | 2550      | 50.2               | 4.9                                         |
|           | (Maldandi) ^           |           | 2450      |           | 2570      |                    | 4.9                                         |
| 3         | BAJRA                  | 990       | 1950      | 1083      | 2000      | 84.7               | 2.6                                         |
| 4         | MAIZE                  | 1131      | 1700      | 1171      | 1760      | 50.3               | 3.5                                         |
| 5         | RAGI                   | 1931      | 2897      | 2100      | 3150      | 50.0               | 8.7                                         |
| 6         | ARHAR(Tur)             | 3432      | 5675      | 3636      | 5800      | 59.5               | 2.2                                         |
| 7         | MOONG                  | 4650      | 6975      | 4699      | 7050      | 50.0               | 1.1                                         |
| 8         | URAD                   | 3438      | 5600      | 3477      | 5700      | 63.9               | 1.8                                         |
| 9         | COTTON (Medium Staple) | 3433      | 5150      | 3501      | 5255      | 50.1               | 2.0                                         |
|           | (Long Staple) ^        |           | 5450      |           | 5550      |                    | 1.8                                         |
| 10        | GROUNDNUT IN SHELL     | 3260      | 4890      | 3394      | 5090      | 50.0               | 4.1                                         |
| 11        | SUNFLOWER SEED         | 3592      | 5388      | 3767      | 5650      | 50.0               | 4.9                                         |
| 12        | SOYABEAN (Yellow)      | 2266      | 3399      | 2473      | 3710      | 50.0               | 9.1                                         |
| 13        | SESAMUM                | 4166      | 6249      | 4322      | 6485      | 50.0               | 3.8                                         |
| 14        | NIGERSEED              | 3918      | 5877      | 3960      | 5940      | 50.0               | 1.1                                         |
|           | RABI CROPS             |           |           |           |           |                    |                                             |
| 1         | WHEAT                  | 866       | 1840      |           |           |                    |                                             |
| 2         | BARLEY                 | 860       | 1440      |           |           |                    |                                             |
| 3         | GRAM                   | 2637      | 4620      |           |           |                    |                                             |
| 4         | MASUR (LENTIL)         | 2532      | 4475      |           |           |                    |                                             |
| 5         | RAPESEED/MUSTARD       | 2212      | 4200      |           |           |                    |                                             |
| 6         | SAFFLOWER              | 3294      | 4945      |           |           |                    |                                             |
|           | OTHER CROPS            |           |           |           |           |                    |                                             |
| 1         | COPRA (Milling)        | 5007      | 7511      | 6347      | 9521      | 50.0               | 26.8                                        |
|           | (Ball)^                |           | 7750      |           | 9920      |                    | 28.0                                        |
| 2         | JUTE                   | 2267      | 3700      | 2535      | 3950      | 55.8               | 6.8                                         |

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