Lok Sabha Question No. 573 (UNSTARRED), answered on 2019-06-25
Subject: MSP for Maize and Cotton
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: T. R. Paarivendhar

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

## LOK  SABHA UNSTARRED QUESTION NO.573

TO BE ANSWERED ON THE  25 TH  JUNE, 2019

## MSP FOR MAIZE AND COTTON

## 573.   DR. T.R. PAARIVENDHAR:

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

- (a) whether the Government has any proposal to fix a reasonable price/minimum price for Maize and Cotton to protect the farmers from economic burden and loss due to high input costs/production costs and low price for their products;
- (b) if so, the details thereof; and
- (c) if not, the time by which the proposal will be implemented?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

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

- (a) to (c): Government  fixes  minimum  support  prices  (MSPs)  of  22  mandated  crops including maize and cotton for every agricultural year 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 & other relevant factors. In addition, MSP for Toria and DeHusked  coconut  is  also  fixed  on  the  basis  of  MSPs  of  Rapeseed/Mustard  and  Copra respectively.

While recommending MSPs, CACP considers important factors like cost of production, overall  demand-supply  situation  of  various  crops  in  domestic  and  world  markets,  domestic and international prices, inter-crop price parity, terms of trade between agricultural and nonagricultural sector, likely effect of price policy on rest of the economy and a minimum of 50 percent as the margin over cost of production.

Cost of production is one of the important factors in the determination of MSPs. While recommending its Price policy, the CACP  considers all costs in a comprehensive manner. The  costs  include  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 in  cash  and  kind  on  the  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.  Hence  the  costs  considered  are  very  comprehensive  and  based  on  the methodology recommended by Expert Committees from time to time.

The Union Budget for 2018-19 had announced the pre-determined principle to keep MSP at levels  of  one  and  half  times  the  cost  of  production.  Accordingly,  Government  has increased MSPs for all mandated crops including maize and cotton with a return of at least 50 percent over all India weighted average cost of production for the season 2018-19.

Government has fixed MSP of maize at Rs. 1700/- per quintal, cotton (medium staple) at  Rs.  5150/-  and  cotton  (long  staple)  at  Rs.  5450/-  per  quintal    for  2018-19  season  which provides a return of 50 percent over the all-India weighted average cost of production.

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