Lok Sabha Question No. 1523 (UNSTARRED), answered on 2019-02-12
Subject: MSP for Crops and Agricultural Products
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: MANSHANKAR NINAMA

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

## LOK  SABHA UNSTARRED QUESTION NO.1523

TO BE ANSWERED ON THE 12 TH   FEBRUARY, 2019

## MSP FOR CROPS AND AGRICULTURAL PRODUCTS

1523.   SHRI  MANSHANKAR NINAMA:

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

- (a) the  crops  for  which  the Government increases Minimum Support Price each year;
- (b) the average increase in Minimum Support  Price  of  these  crops  during  the last  three years  and  the  current  year, crop- wise and year-wise; and
- (c) the impact on inflation and fiscal deficit due to the increase in MSP and the manner in which the Government proposes to contain them?

## 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) & (b):        Government fixes Minimum Support Prices (MSPs) for 22 mandated agricultural crops and fair and remunerative price (FRP) for sugarcane on the basis of the recommendations of the Commission for Agricultural Costs & Prices (CACP), after considering the  views  of  State  Governments  and  Central  Ministries/Departments  concerned  and  other relevant  factors.  The  22  mandated    crops  include  14  Kharif  crops  viz.  paddy,  jowar,  bajra, maize, ragi, arhar, moong, urad, groundnut-in-shell, soyabean, sunflower, sesamum, nigerseed, cotton and 6 Rabi crops viz. wheat, barley, gram, masur (lentil), rapeseed/mustard, safflower and two commercial crops viz. jute and copra. In addition, MSP for toria and de-husked coconut are  also  fixed  on  the  basis  of  MSPs  of  rapeseed/mustard  and  copra  respectively.  Details  of absolute increase in MSP from 2015-16 to 2018-19 is at Annexure.
- (c): Higher  MSP  does  not  necessarily  imply  a  proportionate  increase  in  the  market  price. Price depends on, among others, demand and supply conditions.

Wholesale  prices  of  some  of  the  crops  are  ruling  below  MSP  reflecting  bumper production. This supply response of the farmers owes to incentives in the form of higher MSPs for crops like pulses that had exhibited a chronic shortfall over consumer demand in the earlier years  when  food  inflation  was  in  double  digits  and  overall  inflation  above  comfort  zone.  To address  the  issue  of  wholesale  prices  trending  below  MSP  in  some  mandis  in  some  states, procurement  has  been  stepped  up  and  sufficient  stocks  are  there  to  stabilize  prices  in contingencies of future shortfall in supply relative to demand.

As  regards  fiscal  deficit,  the  Fiscal  Policy  Strategy  Statement  and  the  Medium-Term Fiscal Policy Statement, presented by the Government along with the Budget 2018-19 contains the detailed road-map that Government of India has adopted to reduce its fiscal deficit.

Paddy/Rice  and  wheat  are  procured  for  distribution  under  Public  Distribution  System (PDS).  The    difference  between  the  economic  cost  of  the  grains/cereals  procured  and  their central  issue  prices  under  PDS  is  the  subsidy  outgo  which  is  borne  on  the  Budget.  The additional financial implication on account of higher MSP for paddy for 2018-19 is estimated to be  Rs  12167  crore  as  estimated  by  Department  of  Food  and  Public  Distribution  (DFPD)  on account  of  the  operationalisation  of  the  principle  of  keeping  MSPs  at  a  level  of  atleast  150 percent of the cost of production. The budgetary outgo on account of the losses in procurement operations of pulses and oilseeds is the other additionality may not significantly impact the fiscal deficit outcome.

Annexure Annexure referred to in reply to part (a) & (b) of Lok Sabha Unstarred Question No.1523 due for reply on 12.02.2019.

Absolute increase in Minimum Support Price (MSP)

(Rs/quintal)

| Sl. No.   | Commodity                         | Variety       | 2015-16   | 2016-17   | 2017-18   | 2018-19   |
|-----------|-----------------------------------|---------------|-----------|-----------|-----------|-----------|
|           | KHARIF CROPS                      |               |           |           |           |           |
| 1         | PADDY                             | Common        | 50        | 60        | 80        | 200       |
|           |                                   | Grade 'A'     | 50        | 60        | 80        | 180       |
| 2         | JOWAR                             | Hybrid        | 40        | 55        | 75        | 730       |
|           |                                   | Maldandi      | 40        | 60        | 75        | 725       |
| 3         | BAJRA                             |               | 25        | 55        | 95        | 525       |
| 4         | MAIZE                             |               | 15        | 40        | 60        | 275       |
| 5         | RAGI                              |               | 100       | 75        | 175       | 997       |
| 6         | ARHAR(Tur)                        |               | 275       | 425       | 400       | 225       |
| 7         | MOONG                             |               | 250       | 375       | 350       | 1400      |
| 8         | URAD                              |               | 275       | 375       | 400       | 200       |
| 9         | COTTON                            | Medium Staple | 50        | 60        | 160       | 1130      |
|           |                                   | Long Staple   | 50        | 60        | 160       | 1130      |
| 10        | GROUNDNUT IN SHELL                |               | 30        | 190       | 230       | 440       |
| 11        | SUNFLOWER SEED                    |               | 50        | 150       | 150       | 1288      |
| 12        | SOYABEEN                          |               | 40        | 175       | 275       | 349       |
| 13        | SESAMUM                           |               | 100       | 300       | 300       | 949       |
| 14        | NIGERSEED                         |               | 50        | 175       | 225       | 1827      |
|           | RABI CROPS                        |               |           |           |           |           |
| 15        | WHEAT                             |               | 75        | 100       | 110       | 105       |
| 16        | BARLEY                            |               | 75        | 100       | 85        | 30        |
| 17        | GRAM                              |               | 325       | 500       | 400       | 220       |
| 18        | MASUR (LENTIL)                    |               | 325       | 550       | 300       | 225       |
| 19        | RAPESEED/MUSTARD                  |               | 250       | 350       | 300       | 200       |
| 20        | SAFFLOWER                         |               | 250       | 400       | 400       | 845       |
| 21        | TORIA                             |               | 270       | 270       | 340       | 290       |
|           | OTHER CROPS                       |               |           |           |           |           |
| 22        | COPRA                             | Milling       | 300       | 400       | 550       | 1011      |
|           | (Calender Year)                   | Ball          | 330       | 410       | 545       | 965       |
| 23        | DE-HUSKED COCONUT (Calender Year) |               | 75        | 100       | 160       | 270       |
| 24        | JUTE                              |               | 300       | 500       | 300       | 200       |
| 25        | SUGARCANE                         |               | 10        | 0         | 25        | 20        |

********