Lok Sabha Question No. 75 (STARRED), answered on 2023-02-07
Subject: Efficacy of MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Gaddam Ranjith Reddy, Kavitha Malothu

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE & FARMERS WELFARE DEPARTMENT OF AGRICULTURE & FARMERS WELFARE

## LOK SABHA STARRED QUESTION NO. 75

TO BE ANSWERED ON 7 th  February 2023

## EFFICACY OF MSP

- *75.  DR. G. RANJITH REDDY: SHRIMATI KAVITHA MALOTHU:

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

- (a)      whether it is true that NITI Aayog has conducted a study called 'Efficacy of MSP on Farmers' in 2016 and if so, the details thereof;
- (b)      whether it is also true that the study found that MSP declared by the Government has, in fact, encouraged nearly 80% of farmers for adopting improved methods of farming; and
- (c)     if so, the reasons for which the Government is not giving legislative backing to MSP which  would  further  encourage  farmers  to  adopt  modern  scientific  techniques  and technologies to push their productivity which is far less in our country as compared to other developed countries?

## ANSWER

MINISTER OF AGRICULTURE & 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.  75  DUE  FOR  ANSWER  ON  07.02.2023  REGARDING 'EFFICACY OF MSP'.

(a) & (b):     Yes, Sir. The NITI Aayog had released a study entitled 'Efficacy of Minimum Support Prices  on  farmers'  in  2016,  covering  14  States,  36  Districts,  72  Blocks,  144 Villages  and  1440  Households.  The  study  has  found,  among  other  things,  that  MSP declared by the Government has encouraged 78 % of the farmers covered under the study to adopt improved methods of farming such as high yielding varieties of seeds, organic manure, chemical fertilizer, pesticides and improved methods of harvesting etc.

(c): Government fixes MSPs for 22 mandated agricultural crops on the basis of the recommendations  of  the  Commission  for  Agricultural  Costs  and  Prices  (CACP),  after considering the views of the concerned State Governments and Central Ministries/Departments  and  other  relevant  factors.  To  realize  the  objectives  of  MSP Policy,  Government  extends  price  support  for  paddy  and  wheat  through  the  Food Corporation of India (FCI) and State Agencies. Under this policy, whatever food grains are  offered  by  farmers  within  the  stipulated  period  &  conforming  to  the  specifications prescribed by Government are purchased at MSP by the State Government agencies including FCI for Central Pool. Additionally, Oilseeds, pulses and copra of Fair Average Quality (FAQ) are procured from registered farmers under Price Support Scheme under Umbrella Scheme of PM-AASHA, as per its guidelines at MSP in consultation with the concerned State Government as and when market price of these produce fall below the MSP.  Cotton  and  Jute  are  also  procured  by  Government  at  MSP  through  Cotton Corporation of India (CCI) and Jute Corporation of India (JCI), respectively.

The National Commission  on  Farmers  (NCF)  was  constituted under the Chairmanship of Prof. M.S. Swaminathan, in November 2004, with a mandate to examine the various issues which include a medium-term strategy for food and nutrition security, enhancing productivity, profitability and sustainability, policy reform for flow of rural credit, cost competitiveness of farm commodities, among other. The Commission submitted its final report in 2006. It also prepared the Draft National Policy for Farmers, which was subsequently  approved  by  Government  as  National  Policy  for  Farmers  (NPF),  2007. However,  one  of  the  recommendations  of  NCF  relating  to  Agricultural  Price  Policy  Minimum Support Price (MSP) should be at least 50 percent more than the weighted average cost of production- was not included in NPF.

To give recognition to one of the important recommendations of NCF on Price Policy, Government  in its Union Budget for 2018-19 had made  an  historical announcement to keep MSP at a level of one and half times of the cost of production as a pre-determined principle. Accordingly, MSPs for all mandated Kharif, Rabi and other commercial  crops  has  been  fixed  with  a  return  of  at  least  50  per  cent  over  all  India weighted  average  cost  of  production  since  the  year  2018-19. Consequently,  the procurement of foodgrain has increased from 1037.50 Lakh Metric Tonnes in 2018-19 to 1321.04 Lakh Metric Tonnes in 2021-22. The expenditure incurred (at MSP values) on procurement of foodgrains increased from 1.89 Lakh crores to 2.70 Lakh crores. The number of farmers benefited also increased from 1.51 crores to 1.90 crores in the same period.

Further,  Government  has  taken  various  initiatives  to  give  a  push  to  digital agriculture  in  the  country.  These  include,  National  e-Governance  Plan  in  Agriculture (NeGP-A) wherein funds are released to the State(s)/UT(s) for project involving use of modern technologies; Sub Mission on Agricultural Mechanization (SMAM) which aims at farm  mechanization;  Kisan  Suvidha  mobile  application  to  facilitate  dissemination  of information to farmers on the critical parameters such as weather, market prices, plant protection and National Agriculture Market (e-NAM) trading portal which aims at creating a unified national market for agricultural commodities, among others.

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