Lok Sabha Question No. 81 (STARRED), answered on 2022-12-13
Subject: Increase in MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Amol Ramsing Kolhe, Sunil Dattatray Tatkare

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

## LOK SABHA STARRED QUESTION NO. 81*

TO BE ANSWERED ON 13 th  December 2022

## INCREASE IN MSP

## *81.  DR. AMOL RAMSING KOLHE: SHRI SUNIL DATTATRAY TATKARE:

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

- (a) whether the Government has approved an increase in the Minimum Support Price (MSP) for all Rabi Crops for the marketing season 2023-24;
- (b)  if so, the details thereof along with the increase in the MSP of various agricultural produce during  each  of  the  last  three  years  and  the  current  year  indicating  the  criteria  adopted  for increasing the MSP of these products, crop-wise;
- (c)    whether the Government has conducted any study for assessing the impact of MSP on farmers and if so, the percentage of farmers benefited through MSP during each of the last three years;
- (d)  whether the Government has achieved the objectives of the MSP Policy, if so, the details thereof and if not, the corrective steps taken in this regard; and
- (e)      the  other  measures  being  taken  to  increase  farmers'  income  in  proportion  to  cost  of cultivation?

## ANSWER

## MINISTER OF AGRICULTURE AND FARMERS WELFARE

## कृ ष एवं कसान कयाण मंी

(SHRI NARENDRA  SINGH TOMAR)

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

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  to  (e)  OF  LOK  SABHA STARRED  QUESTION  NO  81*  DUE  FOR  ANSWER  ON  13.12.2022  REGARDING INCREASE IN MSP.

(a)  &  (b):        Yes  Sir,  Government  has  increased  Minimum  Support  Prices  (MSP)  of 6 mandated  Rabi  crops  for  Rabi  Marketing  Season  (RMS)  2023-24,  on  the  basis  of recommendation of Commission for Agricultural Costs & Prices (CACP), after considering  the  views  of  State  Governments  and  Central  Ministries/Departments concerned. The MSP for wheat now stands at 2125 ₹ per quintal; Barley 1735 ₹ per quintal; Gram 5335 ₹ per quintal; Masur 6000 ₹ per quintal; Rapeseed & Mustard 5450 ₹ per quintal and Safflower 5650 ₹ per quintal.

While recommending MSP, CACP considers important factors like overall demand-supply conditions, cost of production, domestic and international prices, intercrop 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  land, water and other production resources and a minimum of 50 percent as the margin over cost of production.  The Cost of production, being an important factor in the determination of MSP, CACP projects cost for current year on the basis of actual paid out costs and imputed value of family labour. Details of increase in MSP of 6 mandated rabi crops for the last three years and current year is given at Annexure I .

(c):    The NITI Aayog (erstwhile Planning Commission) 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 found among other things,  that  MSP  declared  by  the  Government  has  encouraged  78  %  of  the  farmers covered  under  the  study  for  adopting  improved  methods  of  farming  such  as  high yielding varieties of seeds, organic manure, chemical fertilizer, pesticides and improved methods of harvesting etc.

The number of farmers benefited from procurement of foodgrains during 201920,  2020-21,2021-22  were  1.78  crores,  1.79  crores  and  1.93  crores  respectively. Similarly, procurement of foodgrains for the same period were recorded at 114 million tonnes,  129  million  tonnes  and  134  million  tonnes,  respectively.  The  expenditure incurred  (at  MSP  values)  on  procurement  of  foodgrains  during  the  last  three  years 2019-20, 2020-21, 2021-22 were ₹ 2.19 Lakh crores ₹ 2.49 Lakh crores and ₹ 2.75 Lakh crores, respectively.

(d):        The  objective of  MSP is to ensure remunerative prices to the growers for their produce and encourage higher investment and production. The Government in its Union Budget for 2018-19 had announced the pre-determined principle to keep MSP at a level of  one  and  half  times  of  the  cost  of  production.  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. Further, total foodgrain production in the country during 2021-22 stood at 315.72 million tonnes which is highest ever.

The continuous increase in the number of beneficiary farmers under MSP, the quantity  of  food  grains  procured  and  the  expenditure  incurred  on  procurement  is indicating that the scheme is proving successful in achieving its objectives.

(e): Government has adopted and implemented several policies, reforms, developmental programmes and schemes for achieving higher incomes for the farmers directly or indirectly. These include:

## 1. Unprecedented enhancement in budget allocation

In  the  year  2015-16,  the  Budget  allocation  for  Ministry  of  Agriculture  &  FW (including  DARE,  DAH&F)  was  only  ₹ 25460.51 crore.  This  has  increased  by more than 5.44 times to ₹ 1,38,550.93 crore in 2022-23.

## 2. Income support to farmers through PM KISAN

Launch of PM-KISAN in 2019 -an income support scheme providing ₹ 6000 per year in 3 equal installments. More than ₹ 2.2 lakh crores has been released so far to approximately 11.3 crore eligible farmer families.

## 3. Pradhan Mantri Fasal Bima Yojana (PMFBY)

Six year - PMFBY was launched in 2016 addressing problems of high premium rates for farmers and reduction in sum insured due to capping. In past 6 Years of implementation 38 crore farmer applications have been enrolled and over 11.73 crores  (Provisional)  farmer  applicants  have  received  claims.  During  this  period, nearly ₹ 25,185 crores were paid by farmers as their share of premium against which claims of over ₹ 1,24,223 crore (Provisional) have been paid to them. Thus, for  every  100  rupees  of  premium  paid  by  farmers,  they  have  received  about  ₹ 493 as claims.

## 4. Institutional credit for agriculture sector

- i. Increased from ₹ 8.5 lakh crore in 2015-16 with a target to reach ₹ 18.5 lakh crore in 2022-23.
- ii. Benefit of concessional institutional credit through KCC at 4% interest per annum has also now been extended to Animal Husbandry and Fisheries farmers for meeting their short-term working capital needs.
- iii. A  special  drive  has  been  undertaken  since  February  2020  to  provide concessional  institutional  credit  with  focus  on  covering  all  PM-KISAN beneficiaries through Kisan Credit Cards (KCC). As on 11.11.2022, 376.97 lakh new KCC applications have been sanctioned with a sanctioned credit limit of ₹ 4,33,426 crore as part of the drive.

## 5. Fixing of Minimum Support Price (MSP) at one-and-a half times the cost of production -

- i. Government  has  increased  the  MSP  for  all  mandated  Kharif,  Rabi  and other commercial crops with a return of at least 50 per cent over all India weighted average cost of production from 2018-19.
- ii. MSP for Paddy (common) has increased to ₹ 2040 per quintal in 2022-23 from ₹ 1310 per quintal in 2013-14.
- iii. MSP for Wheat increased from ₹ 1400 per quintal in 2013-14 to ₹ 2125 per quintal in 2022-23.

## 6. Promotion of organic farming in the country

- i. Paramparagat  Krishi  Vikas  Yojana  (PKVY)  was  initiated  in  2015-16  to promote organic farming in the country. 32384 clusters have been formed and an area of 6.53 lakh hectare has been covered, benefitting 16.19 lakh farmers. In addition, Under Namami Gange Programme, 123620 hectare area covered and under natural farming 4.09 lakh hectare area covered. Farmers in Uttar Pradesh, Uttarakhand, Bihar and Jharkhand have takenup organic farming on either side of the river Ganga to control river water pollution as well as to fetch additional income to farmers.
- ii. Government  also proposes to promote sustainable natural farming systems  through  the  scheme  Bhartiya  Prakratik  Krishi  Padhati  (BPKP). The proposed scheme aims at cutting down cost of cultivation, enhancing farmer's  income  and  ensuring  resource  conservation  and,  safe  and healthy soils, environment and food.
- iii. Mission Organic Value Chain Development in North East Region (MOVCDNER)  has  been  launched.  379  Farmer  Producer  Companies have  been  formed  comprising  of  189039  farmers  and  covering  172966 hectares area.

## 7. Per Drop More Crop

Per Drop More Crop (PDMC) scheme was launched in the year 2015-16 which aims  to  increase  water  use  efficiency,  reducing  cost  of  inputs  and  increasing productivity at  the  farm  level  through  Micro  Irrigation  technologies  i.e.  drip  and sprinkler  irrigation  systems.  So  far,  an  area  of  69.55  lakh  hectare  has  been covered under Micro irrigation through the PDMC scheme from the year 2015-16.

## 8. Micro Irrigation Fund

A Micro  Irrigation  Fund  of  initial  corpus  ₹  5000 crore has  been  created  with NABARD.  In the Budget Announcement for 2021-22, the corpus of the fund is to be increased to ₹10000 crores. Projects worth ₹ 4710.96 crores covering 17.09 lakh hectares have been approved.

## 9. Promotion of Farmer Producer Organizations (FPOs)

- i. To bring scales of economy to agricultural operations a new Central Sector Scheme for Formation & Promotion of new 10,000 FPOs was launched by Hon'ble Prime Minister on 29 th  February, 2020 with budget outlay of ₹ 6865 crore till 2027-28.
- ii. As on 31.10.2022, 3855 number of FPOs have been registered under new FPO scheme.
10. A National Beekeeping and Honey Mission (NBHM) has been launched in 2020 as  part  of  the  Atma  Nirbhar  Bharat  Abhiyan  to  increase  productivity  of  crops through  pollination  and  increase  in  honey  production  as  an  additional  source  of income. ₹ 500 crore for the period 2020-2021 to 2022-2023 has been allocated for beekeeping  sector. 114  projects for  assistance  of  about ₹  139.23  crores, approved/ sanctioned for funding under NBHM during 2020-21 & 2021-22 till date.

## 11.  Agricultural Mechanization

Agricultural  mechanization  is  an  extremely  vital  to  modernize  agriculture  and reduce  drudgery  of farming operations. During the period  from  2014-15 to March, 2022 an amount of ₹5490.82 crores has been allocated for agricultural mechanization. 13,88,314  numbers  of  machines  and  equipments  have been provided to farmers on subsidy basis.   18,824 custom hiring centers, 403 hightech  hubs  and  16,791  farm  machinery  banks  have  been  established  to  make available agricultural machines and equipments to the farmers on rental basis. During the current year i.e. 2022-23, so far, an amount of ₹ 504.43 crores has been released for distribution of around 65302 machines on subsidy, establishment  of  2804  CHCs,  12  Hi-tech  hubs  and  1260  Village  Level  Farm Machinery Banks.

## 12.  Providing Soil Health Cards to farmers

Soil Health Card Scheme was introduced in the year 2014-15 to optimize usage of nutrients. The following numbers of cards have been issued to farmers;

- i. Cycle-I (2015 to 2017) - 10.74 crore
- ii. Cycle-II (2017 to 2019)- 11.97 crore
- iii. Model Village Programme (2019-20)- 19.64 lakh

## 13.  Setting up of National Agriculture Market ( e-NAM) extension Platform

- i. 1260  mandis  of  22  States  and  03  UTs  have  been  integrated  to  e-NAM platform.
- ii. As  on  31.10.2022,  more  than  1.74  crore  Farmers  &  2.36  Lakh  traders have been registered on e-NAM portal.
- iii. Total  volume  of  6.5  crore  MT  &  19.24  crore  numbers  (bamboo,  betel leaves, coconut, lemon & sweet corn) collectively worth approximately ₹ 2.22  lakh  crore  of  trade  has  been  recorded  on  e-NAM  platform  as  on 31.10.2022.
14.  Launch of the National Mission for Edible Oils - Oil Palm NMEO has been approved with a total outlay of ₹ 11,040 crore. This will bring an additional area of 6.5  lakh  hectare  under  Oil  Palm  plantation with  3.28  lakh  hectare  in  the northeastern states and 3.22 lakh hectare in the rest of India in the next 5 years. The major  focus  of  the  Mission  is  to  provide  Viability  Prices  of  fresh  fruit  bunches (FFBs) to the farmers linked with assured procurement by industry with a simpler price fixing formula. The Central Government will compensate farmers through a viability  gap  payment  if  price  paid  by  industry  is  below  the  viability  price  up  to October, 2037.

## 15.  Agri Infrastructure Fund (AIF)

Since inception of AIF in the year 2020, the scheme has sanctioned an amount of  ₹13681  crore  worth  agriculture  infrastructure  in  the  country  for  more  than 18133 projects. With the support of the scheme, various agriculture infrastructures were created and some of the infrastructure are at the final stage of  completion.  These  infrastructures  include  8076  warehouses,  2788  primary processing units, 1860 custom hiring centres, 937 sorting & grading units, 696 cold  store  projects,  163  assaying  units  and  around  3613  other  kinds  of  postharvest management projects and community farming assets.

## 16.  Improvement in farm produce logistics, Introduction of Kisan Rail.

Kisan Rail has been launched by Ministry of Railways to exclusively cater to movement of perishable agrihorti commodities. First Kisan Rail was started in July  2020.  Till  31 st   October,  2022,  2359  services  on  167  routes  have  been operated.

## 17.  MIDH - Cluster Development Programme:

The Cluster Development Programme (CDP) is designed to leverage geographical  specialisation  of  horticulture  clusters  and  promote  integrated  and market-led  development  of  pre-production,  production,  post-harvest,  logistics, branding, and marketing activities. DA&FW has identified 55 horticulture clusters, of which 12 have been selected for the pilot phase of the CDP.

## 18. Creation of a Start-up Eco system in agriculture and allied sector

So far, 1055 Startups during FY 2019-20 to 2022-23 have been finally selected by different knowledge partners and agribusiness incubators of DA&FW. A total of ₹ 6317.91 lakhs grants-in-aid has been released for funding to these Startups to  the  respective  Knowledge Partners (KPs) & RKVY RAFTAAR Agri Business Incubator (R-ABIs) as grants-in-aid support by DA&FW.

## 19. Achievement in Export of Agri and Allied Agri- Commodities

The  country  has  witnessed  emphatic  growth  in  export  of  agri  and  allied commodities. As compared to the year 2015-16, the Agri and allied export has increased from 32.81 billion USD in 2015-16 to 50.24 billion USD in 2021-22 i.e. an increase of 53.1%.

The  efforts  of  Government  at  positive  implementation  of  these  schemes  have yielded remarkable results towards augmenting the income of the farmers As part of the 'Azadi ka Amrit Mahotsav', Indian Council of Agricultural Research (ICAR) has released a  book,  which  contains  compilation  of  success  stories  of  75,000  farmers  out  of innumerable successful farmers who have increased their income more than two times.

Annexure Annexure referred to in reply to part (a) & (b) of Lok Sabha Starred Question No. 81 due for reply on 13.12.2022 Minimum Support Price (MSP) of mandated Agricultural Crops (MSP in ₹ per quintal)

|         |                    | Minimum Support Prices (₹ per quintal)   | Minimum Support Prices (₹ per quintal)   | Minimum Support Prices (₹ per quintal)   | Minimum Support Prices (₹ per quintal)   | Absolute Increase over previous year   | Absolute Increase over previous year   | Absolute Increase over previous year   |
|---------|--------------------|------------------------------------------|------------------------------------------|------------------------------------------|------------------------------------------|----------------------------------------|----------------------------------------|----------------------------------------|
| Sl. No. | Commodity          | 2019- 20                                 | 2020- 21                                 | 2021- 22                                 | 2022- 23                                 | 2020- 21                               | 2021- 22                               | 2022- 23                               |
| 1       | WHEAT              | 1925                                     | 1975                                     | 2015                                     | 2125                                     | 50                                     | 40                                     | 110                                    |
| 2       | BARLEY             | 1525                                     | 1600                                     | 1635                                     | 1735                                     | 75                                     | 35                                     | 100                                    |
| 3       | GRAM               | 4875                                     | 5100                                     | 5230                                     | 5335                                     | 225                                    | 130                                    | 105                                    |
| 4       | MASUR (LENTIL)     | 4800                                     | 5100                                     | 5500                                     | 6000                                     | 300                                    | 400                                    | 500                                    |
| 5       | RAPESEED & MUSTARD | 4425                                     | 4650                                     | 5050                                     | 5450                                     | 225                                    | 400                                    | 400                                    |
| 6       | SAFFLOWER          | 5215                                     | 5327                                     | 5441                                     | 5650                                     | 112                                    | 114                                    | 209                                    |

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