Lok Sabha Question No. 976 (UNSTARRED), answered on 2018-07-24
Subject: Criteria for Fixation of Minimum Support Price
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: CHANDRAKANT BHAURAO KHAIRE

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

## LOK  SABHA

## UNSTARRED QUESTION NO. 976 TO BE ANSWERED ON THE 24 TH  JULY, 2018

## CRITERIA FOR FIXATION OF MINIMUM SUPPORT PRICE

976.   SHRI CHANDRAKANT KHAIRE:

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

- (a) the details of the formula which is used by the Government to fix the Minimum Support Price(MSP);
- (b) whether it is a fact that farmers are not satisfied with the MSP fixed by the Government despite increasing 50 per cent MSP for 14 kharif crops recently;
- (c) if so, the reasons therefor; and
- (d) the corrective steps taken by the Government thereon?

## 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 kharif and rabi crops and  fair  &  remunerative  prices  (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  De-Husked  coconut  is  also  fixed  on  the  basis  of  MSPs  of Rapeseed/Mustard and Copra respectively.

CACP  while  recommending  MSPs  considers  a  host  of  factors  including  weighted average  cost  of  production  of  crops  at  an  all  India  basis.    The  costs  considered  are comprehensive and 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 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. The Union Budget for 2018-19 had announced the pre-determined principle to keep MSPs at levels of one and half times the cost of production. CACP's Report on Price Policy for kharif crops of 2018-19 season is broadly in line with the Budget announcement.

(b) & (c): The Government has increased the MSPs of all kharif crops for 2018-19 season on 4 th July,  2018.The  decision  to  increase  the  Minimum  Support  Prices  (MSPs) for  all  kharif crops for  2018-19  season  is a  historic  one  as  it  redeems  the  promise  of  the  pre-determined principle  of  fixing  the  MSPs  at  a  level  of  at  least  150  per  cent  of  the  cost  of  production announced by the Union Budget for 2018-19. No separate survey has been made in this regard. However, various reports have indicated that farmers are happy with the announcement.

(d): Government has taken several initiatives to enhance the production and productivity of agricultural  crops  and  to  enhance  income  of  farmers  of  the  country.  These  include  National Food  Security  Mission  (NFSM),  Rashtriya  Krishi  Vikas  Yojana  (RKVY),  Soil  Health  Cards (SHC),  Pradhan  Mantri  Krishi  Sinchai  Yojana  (PMKSY),  Pradhan  Mantri  Fasal  Bima  Yojana (PMFBY),  Paramparagat  Krishi  Vikas  Yojana  (PKVY),  National  Mission  for  Sustainable Agriculture  (NMSA),  e-National  Agriculture  Market  (e-NAM),  Farmer  Producer  Organization (FPOs),  New  Model  Agricultural  produce  and  Livestock  Marketing  (Promotion  &  Facilitation) Act, 2017 and a Committee of the Government has been set up to frame policies for doubling the farmer's income by 2022.

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