Lok Sabha Question No. 1210 (UNSTARRED), answered on 2018-12-18
Subject: Selling of Agricultural Produce at MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: RAVNEET SINGH

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

## LOK  SABHA UNSTARRED QUESTION NO. 1210

TO BE ANSWERED ON THE 18 TH  DECEMBER, 2018

## SELLING OF AGRICULTURAL PRODUCE AT MSP

1210.   SHRI RAVNEET SINGH:

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

- (a) whether the Government plans to change the definition of the production cost from A2 + FL to C2 as recommended by the Swaminathan Commission when determining the MSP;
- (b) if not, the reasons therefor;
- (c) the details of the MSP calculated by the CACP for the State of Punjab for the year 2018-19 up till now, district-wise; and
- (d) the details of the difference between the MSP computed at C2 and the MSP computed at A2 by the Government for Punjab?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI PARSHOTTAM RUPALA)

- (a) & (b): Government  fixes  minimum  support  prices  (MSPs)  of  22  mandated  agricultural crops and fair and remunerative price (FRP) for sugarcane on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP).

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  by  the  then Government, 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.

Government has increased the  MSPs  for all  mandated  crops  with  a  return  of  atleast  50 percent  of  cost  of  production  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.

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.

Continue….2/-

CACP considers both 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) & d): MSP  is  determined  for  the  country  as  a  whole  and  not  region  or  state-specific. Therefore,  no  separate  calculation  of  MSP  has  been  made  for  State  of  Punjab.  As  per  the state-wise  cost  projections  by  CACP,  cost  of  production  in  Punjab  for  major  crops  are  given  in Annexure.

## ANNEXURE

## Annexure referred to in reply to part (c) and (d) of Lok Sabha Unstarred Question No. 1210 due for reply on 18.12.2018. Minimum Support Price, Cost* of production and Returns during 2018-19 in Punjab for major crops.

| S.No.   | Commodity              | 2018-19          | 2018-19                                    | 2018-19              |
|---------|------------------------|------------------|--------------------------------------------|----------------------|
|         |                        | MSP (Rs/quintal) | Cost of production for Punjab (Rs/quintal) | Return over cost (%) |
| 1       | Paddy (common)         | 1750             | 702                                        | 149.3                |
| 2       | Maize                  | 1700             | 961                                        | 76.9                 |
| 3       | Cotton (Medium Staple) | 5150             | 3304                                       | 55.9                 |
| 4       | Wheat                  | 1840             | 654                                        | 181.3                |

* 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.

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