Lok Sabha Question No. 311 (STARRED), answered on 2021-08-10
Subject: Return over Cost of Cultivation
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Sajda Ahmed

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

## LOK  SABHA STARRED QUESTION NO. 311

TO BE ANSWERED ON THE  10 TH  AUGUST, 2021

## RETURN OVER COST OF CULTIVATION

- *311.     SHRIMATI SAJDA AHMED:

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

- (a) the policy adopted by the Government aimed at a return over the cost of cultivation;
- (b) whether  the  Government has  assessed  the  impact  of  the  hike  in  Minimum  Support Price (MSP) among the distressed farmers; and
- (c) if so, the details thereof?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी

(SHRI NARENDRA  SINGH TOMAR)

- (a) to (c): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (c)  OF  LOK  SABHA STARRED QUESTION NO. 311   DUE FOR REPLY ON 10 TH  AUGUST, 2021.

- (a): The Government in its Union Budget for 2018-19 had announced the pre-determined principle to keep Minimum Support Price (MSP) at a level of one and half times of the cost of production. Accordingly, Government has increased the MSP for all mandated Kharif, Rabi and  other  commercial  crops  with  a  return  of  atleast  50  per  cent  over  all  India  weighted average cost of production from the agricultural year 2018-19 onwards. In addition to cost of production, Commission for Agricultural Cost & Prices (CACP) also considers various other factors while recommending MSP which include overall demand-supply situations of various crops  in  domestic  and  world  markets,  domestic  and  international  prices,  inter-crop  price parity, terms of trade between agriculture and non-agriculture sector among others.
- (b) & (c): Enhanced  percentage  return  over  the  cost  of  production  is  bound  to  have positive impact on increase in the farmers' income. Apart from this, several steps have been taken  by  the  Ministry  for  the  benefits  of  farmers  by  way  of  providing  schemes  and interventions for improving the income of farmers, and the details are given in Annex .

## Annex referred to in reply to part (b) to (c) of Lok Sabha Starred Question No. 311 due for reply on 10.08.2021

Schemes and interventions for improving the income of farmers:

- (1) With  a  view  to  provide  income  support  to  all  farmer  families  across  the  country, Government  had  started  a  new  Central  Sector  Scheme,  namely,  ' Pradhan  Mantri  Kisan Samman Nidhi (PM-KISAN) '. The scheme aims to provide a payment of Rs 6000/- per year, in 3  equal  installments.  A  total  of  Rs.  1.39  lakh  crore  has  been  released  so  far  to  11.05  crore farmer families.
- (2) With a view to provide social security net for Small and Marginal Farmers (SMF) as they have  minimal  or  no  savings  to  provide  for  old  age  and  to  support  them  in  the  event  of consequent loss of livelihood, the Government is implementing a new Central Sector Scheme i.e. Pradhan Mantri Kisan Maan Dhan Yojana (PM-KMY) for  providing  old  age  pension  to these farmers. Under this Scheme, provision has been made for a minimum fixed pension of Rs. 3000/- to the eligible small and marginal farmers, subject to certain exclusion clauses, on attaining the age of 60 years. A total of 21,39,756 farmers have joined the scheme till now.
- (3) To ensure flow of adequate credit, Government sets annual target for the flow of credit to the agriculture sector and Banks have been consistently surpassing the annual target. The agriculture  credit  flow  target  has  been  set  at  Rs.  13.50  lakh  crore  for  the  F.Y.2019-20  and Rs.15.00 lakh crore for F.Y. 2020-21 and against this Rs 13.92 lakh crore and Rs 15.58 lakh crore respectively has been disbursed. For F.Y. 2021-22, agriculture credit flow target has been set at Rs. 16.50 lakh crore.
- (4) Farmer Producer Organisation (FPOs): The Union Budget 2019-20, had announced formation of 10,000 new Farmer Producer Organisation (FPOs) to ensure economies of scale for farmers and better access to markets for better realization of prices.  Pursuant to the budget announcement,  DA&FW  has  approved  a  new  Central  Sector  Scheme  titled  'Formation  and Promotion of Farmer Produce Organizations (FPOs)' to form and promote 10,000 new FPOs with a total  budgetary provision of Rs 4,496 crore for five years (2019-20 to 2023-24) with a further  committed  liability  of  Rs  2,369  crore  for  the  period  from  2024-25  to  2027-28  towards handholding of each FPO for five years from its aggregation and formation. About 6000 FPOs are  already  existing  in  the  country  promoted  by  National  Bank  for  Agriculture  and  Rural Development (NABARD),  Small  Farmers  Agri.  Business  Consortium  (SFAC),National  Rural Livelihoods Mission (NRLM), etc. As per the new scheme 2365 FPO produce cluster have been allocated to Implementing Agencies(IAs)  for formation of FPOs in Financial Year 2020-21.

(5) With  a  view  to  provide  better  insurance  coverage  to  crops  for  risk  mitigation,  a  crop insurance scheme namely Pradhan Mantri Fasal Bima Yojana (PMFBY) was launched from Kharif  2016  season.  This  scheme  provides  insurance  cover  for  all  stages  of  the  crop  cycle including  post-harvest  risks  in  specified  instances,  with  low  premium  contribution  by  farmers. For Kharif  2020,  a total  of  4.21  crore farmers  have  been  insured  over  an  area  of  2.83  crore hectare and claim of Rs.5434 crore have been paid to 62.3 lakh farmers.

(6) Further, under Interest Subvention Scheme 2018-19 ,  in  order  to  provide relief  to the farmers on occurrence of natural calamities, the interest subvention of 2% shall continue to be available to banks for the first year on the restructured amount. In order to discourage distress sale by farmers and to encourage them to store their produce in warehouses against negotiable receipts, the benefit of interest subvention will be available to small and marginal farmers having Kisan Credit Card for a further period of upto six months of post harvest on the same rate as available to crop loan.

(7) Extending the reach of institutional credit to more and more farmers is priority area of the Government and to achieve this goal, the Government provides interest subvention of 2% on short-term crop loans up to Rs.3.00 lakh. Presently, loan is available to farmers at an interest rate of 4% per annum on prompt repayment.

(8) Government  has  launched  an  umbrella  scheme  of  'Pradhan  Mantri  Annadata  Aay Sanrakshan Abhiyan' (PM-AASHA) for procurement of pulses and oilseeds on which MSP is announced.

(9) The Government has extended the facility of Kisan Credit Card (KCC) to the farmers practicing animal husbandry and fisheries related activities. Processing fee, inspection, ledger folio  charges  and  all  other  service  charges  for  short  term  crop  loans  upto  Rs.3.00  lakh  have been waived off. Collateral free loan limit for short term agri credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh.

(10) Provision  of  Rs.  1,00,000  crore  for  funding  Agriculture  Infrastructure  Projects  at  farmgate & aggregation points.

(11) e- National  Agricultural Market (e-NAM): In order to provide better marketing facilities for farmers, the Government is implementing National Agriculture Market (e-NAM) scheme for transparent  price  discovery  for  remunerative  prices  for  the  farmers  for  their  produce  through competitive online bidding system. So far, 1000 wholesale regulated markets of 18 States and 03  UTs  have  been  integrated  with  e-NAM  platform.  Under  the  scheme,  apart  from  providing technical support, financial assistance upto Rs. 75 lakh per mandi is also provided to States/ UTs  for  electronic  weighing  scale,  computer  IT  equipments,  assaying  equipments,  cleaning/ sorting/ grading equipments and bio- composting unit.

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