Lok Sabha Question No. 453 (UNSTARRED), answered on 2019-02-05
Subject: Minimum Support Price
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: SRINIVAS KESINENI

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

## LOK  SABHA UNSTARRED QUESTION NO.453

TO BE ANSWERED ON THE  5 TH  FEBRUARY, 2019

## MINIMUM SUPPORT PRICE

## 453.   SHRI KESINENI NANI:

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

- (a) the  formula  adopted  for  determining  the  Minimum  Support  Price  (MSP)  along  with MSP of different crops, crop-wise;
- (b) whether the latest MSP for crops matches with the price formula of C2 plus 50 per cent as recommended by the Swaminathan Commission on Farmers and if so, the details thereof and if not, the reasons therefor; and
- (c) the  measures  taken  by  the  Government  over  the  last  four  years  in  ensuring  MSP equal to C2 plus 50 percent?

## 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): Government fixes minimum support prices (MSPs) of 22 mandated agricultural crops (14 kharif crops, 6 rabi crops and 2 other commercial crops) and fair & remunerative price (FRP) for  sugarcane on  the  basis  of  recommendations  of  the  Commission  for  Agricultural Costs & Prices (CACP). In addition, MSP for toria and de-husked coconut is also fixed on the basis of MSPs of rapeseed/mustard and Copra respectively. While recommending MSPs, the CACP considers  important factors like cost of production, overall demand-supply conditions, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect on the rest of the economy, besides ensuring rational utilization of productive resources like land and water. From  2018-19, the Government has ensured that the MSPs are fixed at least at a level of 150% of the cost of production.  Details  of  cost,  MSP  and  percent  return  over  cost  for  the  years  2017-18  and 2018-19 is at Annexure.
- (b): The National Commission on Farmers (NCF) headed by Dr. M. S. Swaminathan has recommended that the MSP should be at least 50 percent more than the weighted average cost of production. However, when the National Policy for Farmers, 2007 was finalized, this recommendation of providing 50 per cent returns over cost of production was not included. Dr.  M. S. Swaminathan in his Report on NCF had discussed different dimensions of fixing MSPs, but while finalizing National Policy on Farmers, the then Government had accepted the current established methods.

CACP  considers  A2+FL  and  C2  costs  while  recommending  MSPs.  CACP  reckons only A2+FL cost for return. C2 costs are used by CACP primarily as benchmark reference costs  (opportunity  costs)  to  see  if  the  MSPs  recommended  by  them  at  least  cover  these costs in some of the major producing States.

(c): Government  generally  increases  the  MSPs  of  all  notified  crops  which  provide adequate return over cost of production. Government has increased MSPs substantially for all mandated crops for the season 2018-19 . 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 for all mandated crops.

Government has taken several initiatives to raise the yield levels, reduce the cost of production  and  thereby  provide  better  returns  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 systems etc.

## Annexure referred to in reply to part (a) of Lok Sabha Unstarred Question No.453 due for reply on 05.02.2019.

Cost*, Minimum Support Price (MSP) and percent return over cost (Rs/quintal)

|         | Commodity              | 2017-18   | 2017-18   | 2017-18            | 2018-19   | 2018-19   | 2018-19            |
|---------|------------------------|-----------|-----------|--------------------|-----------|-----------|--------------------|
| Sl. No. | KHARIF CROPS           | Cost      | MSP       | % Return over cost | Cost      | MSP       | % Return over cost |
| 1       | PADDY(Common)          | 1117      | 1550      | 38.8               | 1166      | 1750      | 50.1               |
|         | (Grade A) ^            |           | 1590      |                    |           | 1770      |                    |
| 2       | JOWAR (Hybrid)         | 1556      | 1700      | 9.3                | 1619      | 2430      | 50.1               |
|         | (Maldandi) ^           |           | 1725      |                    |           | 2450      |                    |
| 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               |
|         | (Long Staple) ^        |           | 4320      |                    |           | 5450      |                    |
| 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               |
| 7       | TORIA ^                |           | 3900      |                    |           | 4190      |                    |
|         | OTHER CROPS            |           |           |                    |           |           |                    |
| 1       | COPRA (Milling)        | 4758      | 6500      | 36.6               | 5007      | 7511      | 50.0               |
|         | (Ball)^                |           | 6785      | 42.6               |           | 7750      |                    |
| 2       | DE-HUSKED COCONUT ^    |           | 1760      |                    |           | 2030      |                    |
| 3       | JUTE                   | 2160      | 3500      | 62.0               | 2267      | 3700      | 63.2               |
| 4       | SUGARCANE              | 152       | 255       | 67.8               | 155       | 275       | 77.4               |

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