Lok Sabha Question No. 298 (UNSTARRED), answered on 2021-07-20
Subject: Role of MSP in Doubling Farmers Income
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Dr. T. Sumathy (a) Thamizhachi Thangapandian, K. Shanmuga Sundaram

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

## LOK SABHA UNSTARRED QUESTION NO.  298

TO BE ANSWERED ON THE 20 TH  JULY, 2021

## ROLE OF MSP IN DOUBLING FARMERS INCOME

298. DR. T. SUMATHY (A) THAMIZHACHITHANGAPPANDIAN: SHRI SHANMUGA SUNDARAM K.:

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

- (a) the steps taken by the Government to double the income of the farmers and the role of Minimum Support Price (MSP);
- (b)  whether  the  Union  Government  is  aware  of  the  fact  that  the  cost  incurred  for farming and agriculture production has doubled in the last seven years due to the increase  in  the  remuneration  of  farm  workers,  escalation  of  fuel/fertilizer/farm equipment prices which does not commensurate with the net income generated by farmers;
- (c)  if  so,  the  details  thereof  and  the  effective  steps  taken  by  the  Government  to provide adequate support to farmers and thereby double their income;
- (d)  the  targets  fixed  by  States  for  MSP  allocation  for  the  year  2020  and  the achievements made against the target till date;
- (e) whether the Government has any legislation to procure farm products at MSP, if the prices of agricultural products purchased by the States are below the MSP;
- (f) if so, the details thereof and if not, the reasons therefor;
- (g) the steps taken by the Government to increase the MSP provided and bring all agricultural produce under the ambit of MSP; and
- (h)  whether  the  Government  proposes  to  introduce  'Bhavantar  Price'  system throughout the country for compensating farmers for the difference between MSP and actual market price, 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) : The  Government  constituted  an  Inter-ministerial  Committee  in  April, 2016 to examine issues relating to 'Doubling of Farmers Income' and recommend strategies  to  achieve  the  same,  The  Committee    submitted  its  final  Report  to  the Government  in  September,  2018  containing  the  strategy  for  doubling  of  farmers' income by the year 2022. After acceptance of the DFI Committee recommendations, the  Government  has  constituted  an  'Empowered  Body'  to  review  and  monitor  the progress.

The Government has adopted several developmental programmes, schemes, reforms and policies that focus on higher incomes for the farmers. All these policies & programmes are being supported by higher budgetary allocations, non-budgetary financial resources by way of creating Corpus Funds like Micro Irrigation Fund and Agri-marketing scheme to strengthen eNAM and GrAMs, as also in the Ministry of Fisheries,  Animal  Husbandry  and    Dairying  to  promote  dairy  and  fishery  sectors. There have been several reforms to unleash the potential and these include Market Reforms like Model APLMC (Promotion & Facilitation) Act, 2017; Establishment of Gramin  Agriculture Markets (GrAMs); Agri-Export Policy,  2018;  The  Farmers Produce Trade  and  Commerce (Promotion &  Facilitation)  Act,  2020;  The  Farmers (Empowerment  &  Protection)  Agreement  on  Price  Assurance  and  Farm  Services Act.  2020; Amendments to Essential Commodities Act, 1955; Promotion of 10,000 FPOs with necessary financial support under Atma Nirbhar Package (Agriculture)and Supplementary  Income  transfers  under  PM-KISAN;  Pradhan  Mantri  Fasal  Bima Yojna  (PMFBY);  Pradhan  Mantri  Krishi  Sinchai  Yojana  (PMKSY);  Increase  in Minimum Support Price (MSPs) for all Kharif& Rabi Crops ensuring a minimum of 50 percent of profit margin on the cost of production; Har Med Par Ped; Bee-Keeping; Rashtriya Gokul Mission; Blue Revolution; Interest Subvention Scheme; Kisan Credit Card (KCC) that now offers production loan to even dairy & fishery farmers besides agricultural  crops  etc.  In  the  Budget  Announcement  2021-22,  allocation  to  Micro Irrigation  Fund  has  been  doubled  to  Rs  10,000  crore  and  Institutional  Credit  has been increased to Rs 16.50 lakh crore. A list of various interventions and schemes launched for the benefit of farmers is at Annexure I .

(d): Before the onset of each marketing season, Department of Food and Public Distribution, Government of India holds a consultative meeting with officials of Food Corporation of  India (FCI), State  Governments and others to make assessment of availability of wheat and paddy/rice for procurement at MSP based on the prospects of production and  market  situation.  The  procurement  estimates  of  the  State Government/UTs and the procurement achievement made against the estimates for wheat and rice (for Marketing Season 2019-20 and 2020-21) is at Annexure II.

(e) & (f): The Government of India announces Minimum Support Prices (MSP) for  22  major  agricultural  commodities  of  Fair  Average  Quality  (FAQ)  each  year  in both  the  Crop  seasons  after  taking  into  account  the  recommendations  of  the Commission for Agricultural Coasts  and Prices (CACP). Government also extends remunerative price to farmers through its various interventions schemes.

- (g): MSPs  are  fixed  for  those  crops  which  are  widely  grown,  have  large  area under cultivation, items of mass consumption and non-perishable in nature with fairly long shelf life and necessary for maintaining food security.  Government announces Minimum Support Prices (MSPs) for 22 mandated crops based on the recommendations  of  the  Commission  for  Agricultural  Costs  &  Prices  (CACP) after considering the views of concerned State Governments and Central Ministries/Departments. The 22 mandated  crops include 14 Kharif crops viz. paddy, jowar, bajra, maize, ragi, arhar, moong,  urad, groundnut,  soybean (yellow), sunflower  seed,  sesamum, nigerseed,  cotton  and  6 Rabi  crops viz.  wheat,  barley, gram, masur (lentil), rapeseed and mustard, safflower and two commercial crops viz. jute  and  copra.  In  addition  to  that,  MSP  for  toria  and  de-husked  coconut  are  also fixed on the basis of MSPs of rapeseed & mustard and copra respectively.

(h): There is no scheme by the name of 'Bhavantar Price' under implementation by the Central Government.

## Annexure I

## List of various interventions and schemes launched for the benefit of farmers.

- (i)    With a view to provide income support to all farmers' families across the country, to enable them to take care of expenses related to agriculture and allied activities as well  as  domestic  needs,  the  Central  Government  started  a  new  Central  Sector Scheme,  namely,  the  Pradhan  Mantri  Kisan  Samman  Nidhi  (PM-KISAN).  The scheme  aims  to  provide  a  payment  of  Rs.  6000/-  per  year,  in  three  4-monthly installments  of  Rs.  2000/-  to  the  farmers  families,  subject  to  certain  exclusions relating to higher income groups.
- (ii)      Further  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  has  decided  to implement  another  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, a minimum fixed pension of Rs. 3000/- will be provided to the eligible small and marginal farmers, subject to certain exclusion clauses, on attaining the age of 60 years.
- (iii)   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.
- (iv)  Giving  a  major  boost  for  the  farmer's  income,  the  Government  has  approved  the increase in the Minimum Support Price (MSPs) for all Kharif& Rabi crops for 2018-19 season at a level of at least 150 percent of the cost of production.
- (v) Implementation of flagship scheme of distribution of Soil Health Cards to farmers so that the use of fertilizers can be rationalized.
- (vi) 'Per drop more  crop' initiative under which drip/sprinkler irrigation is being encouraged  for  optimal  utilization  of  water,  reducing  cost  of  inputs  and  increasing productivity.
- (vii)   'Paramparagat Krishi Vikas Yojana (PKVY)' for promoting organic farming.
- (viii)  Launch  of  e-NAM  initiative  to  provide  farmers  an  electronic  transparent  and competitive online trading platform.
- (ix)  Under  'HarMedh  Par  Ped',  agro  forestry  is  being  promoted  for  additional  income. With the amendment of Indian Forest Act, 1927, Bamboo has been removed from the definition of trees. A restructured National Bamboo Mission has been launched in the year 2018 to promote bamboo plantation on non forest government as well as private land and emphasis on value addition, product development and  markets.
- (x)   Giving a major boost to the pro-farmer initiatives, the Government has approved a new  Umbrella Scheme  'Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PMAASHA)'.  The Scheme is aimed at ensuring remunerative prices to the farmers

for their produce  as  announced  in  the  Union  Budget  for  2018.  This  is  an unprecedented step taken by Govt. of India to protect the farmers' income which is expected to go a long way towards the welfare of farmers.

- (xi)  Bee  keeping  has  been  promoted  under  Mission  for  Integrated  Development  of Horticulture  (MIDH)  to  increase  the  productivity  of  crops  through  pollination  and increase the honey production as an additional source of income of farmers.
- (xii)  To  ensure  flow  of  adequate  credit,  Government  sets  annual  target  for  the  flow  of credit to the agriculture sector, 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, Rs.15.00 lakh crore for F.Y. 2020-21 and Rs 16.50 lakh crore for FY 2021-22.
- (xiii) 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.
- (xiv) 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 post harvest on the same rate as available to crop loan.
- (xv)  The Government has extended the facility of Kisan Credit Card (KCC) to the farmers practicing  animal  husbandry  and  fisheries  related  activities.   All  processing  fee, inspection, ledger folio charges and all other services charges have been waived off for fresh renewal of KCC. Collateral fee loan limit for short term agri-credit has been raised from Rs.1.00 lakh to Rs.1.60 lakh.  KCC will be issued within 14 days from the receipt of completed application.
- (xvi) Several market reforms have been rolled out . These include
- a. Model APLMC (Promotion & Facilitation) Act, 2017
- b. Establishment of 22,000 number of Gramin Agriculture Markets (GrAMs) as aggregation platforms
- c. Agri-Export Policy, that targets to double agri-exports by 2022
- d. The  Farmers  Produce  Trade  and  Commerce  (Promotion  &  Facilitation) Act., 2020
- e. The Farmers (Empowerment & Protection) Agreement on Price Assurance and Farm Services Act.,  2020
- f. Amendments  to  Essential  Commodities  Act,  1955,  that  deregulates various agri-commodities
- g. Promotion of 10,000 FPOs by 2024

## (xvii) Creation of Corpus Funds

- a.  Micro Irrigation Fund - Rs. 10,000 crore
- b.  Agri-marketing Fund to strengthen eNAM and GrAMs - Rs. 2,000 crore
- c. Agricultural Infrastructure Fund (AIF) to build agri-logistics (backward & forward linkages) - Rs. 100,000 crore including Rs 500 crores for Beekeeping

## ESTIMATE AND PROCUREMENT OF RICE

(Figures in LMT)

| STATE/UT          | KMS 2019-20   | KMS 2019-20   | KMS 2019-20   | KMS 2019-20   | KMS 2020-21   | KMS 2020-21   | KMS 2020-21   | KMS 2020-21   |
|-------------------|---------------|---------------|---------------|---------------|---------------|---------------|---------------|---------------|
|                   | Estimate      | Procurement   | Procurement   | Procurement   | Estimate      | Procurement#  | Procurement#  | Procurement#  |
|                   |               | Kharif        | Rabi          | total         |               | Kharif        | Rabi          | total         |
| A&N ISLANDS       |               |               |               |               |               |               |               |               |
| ANDHRA PRADESH    | 63.37         | 32.05         | 23.28         | 55.32         | 72.00         | 31.71         | 23.40         | 55.11         |
| TELANGANA         | 91.92         | 31.55         | 42.99         | 74.54         | 105.00        | 32.66         | 61.33         | 94.00         |
| ASSAM             | 1.67          | 1.28          | 0.84          | 2.11          | 5.60          | 1.26          |               | 1.26          |
| BIHAR             | 12.00         | 13.41         |               | 13.41         | 30.00         | 23.84         |               | 23.84         |
| CHANDIGARH        | 0             | 0.15          |               | 0.15          | 0.00          | 0.19          |               | 0.19          |
| CHHATISGARH       | 48.00         | 52.23         |               | 52.23         | 60.00         | 39.76         |               | 39.76         |
| DELHI             | 0             |               |               |               | 0.00          |               |               |               |
| GUJARAT           | 0.35          | 0.14          |               | 0.14          | 0.84          | 0.74          |               | 0.74          |
| HARYANA           | 40.00         | 43.07         |               | 43.07         | 44.00         | 37.89         |               | 37.89         |
| HIMACHAL PRADESH  | 0.01          |               |               |               | 0.00          |               |               |               |
| JAMMU & KASHMIR   | 0             | 0.10          |               | 0.10          | 0.27          | 0.26          |               | 0.26          |
| JHARKHAND         | 2.00          | 2.55          |               | 2.55          | 3.00          | 4.27          |               | 4.27          |
| KARNATAKA         | 2.12          | 0.37          | 0.05          | 0.41          | 12.25         | 1.38          |               | 1.38          |
| KERALA            | 4.50          | 2.16          | 2.66          | 4.82          | 5.80          | 2.58          | 2.62          | 5.20          |
| MADHYA PRADESH    | 14.00         | 17.40         |               | 17.40         | 27.00         | 24.97         |               | 24.97         |
| MAHARASHTRA       | 12.70         | 8.51          | 3.16          | 11.67         | 15.88         | 9.07          | 2.70          | 11.77         |
| NAGALAND          | 0             |               |               | 0.00          | 0.00          |               |               | 0.00          |
| ODISHA            | 43.50         | 36.25         | 11.73         | 47.98         | 48.00         | 42.80         | 9.82          | 52.62         |
| PUDUCHERRY        | 0.5           | 0.00          | 0.00          | 0.00          | 0.10          |               |               |               |
| PUNJAB            | 114.00        | 108.76        |               | 108.76        | 113.00        | 135.89        |               | 135.89        |
| TRIPURA           | 0.34          | 0.09          | 0.06          | 0.14          | 0.34          | 0.08          | 0.07          | 0.15          |
| RAJASTHAN         | 0             |               |               |               | 0.00          |               |               |               |
| TAMIL NADU        | 13.44         | 13.80         | 8.24          | 22.04         | 29.00         | 18.34         | 7.07          | 25.42         |
| UTTAR PRADESH     | 33.00         | 37.90         |               | 37.90         | 37.00         | 44.78         |               | 44.78         |
| UTTRAKHAND        | 5.00          | 6.82          |               | 6.82          | 6.70          | 7.12          |               | 7.12          |
| WEST BENGAL       | 26.00         | 15.18         | 3.21          | 18.38         | 26.80         | 15.73         | 0.11          | 15.84         |
| OTHERS            | 0.64          |               |               |               | 0.00          |               |               |               |
| ALL INDIA TOTAL : | 529.05        | 423.77        | 96.21         | 519.97        | 642.58        | 475.32        | 107.13        | 582.45        |

## Annexure II

ESTIMATE AND PROCUREMENT OF WHEAT

(Figures in LMT)

| STATE/UT         | RMS 2019-20   | RMS 2019-20   | RMS 2020-21   | RMS 2020-21   |
|------------------|---------------|---------------|---------------|---------------|
|                  | Estimate      | Procurement   | Estimate      | Procurement   |
| Punjab           | 125.00        | 129.12        | 135.00        | 127.14        |
| Haryana          | 85.00         | 93.20         | 95.00         | 74.00         |
| Uttar Pradesh    | 50.00         | 37.00         | 55.00         | 35.77         |
| Uttarakhand      | 2.00          | 0.42          | 2.00          | 0.39          |
| Madhya Pradesh   | 75.00         | 67.25         | 130.00        | 129.42        |
| Gujarat          | 0.50          | 0.05          | 1.25          | 0.77          |
| Rajasthan        | 17.00         | 14.11         | 21.74         | 22.25         |
| Bihar            | 2.00          | 0.03          | 2.00          | 0.05          |
| Jharkhand        |               |               |               |               |
| Karnataka        |               |               |               |               |
| Delhi            |               |               |               | 0.00          |
| J&K              |               |               |               | 0.00          |
| Maharashtra      |               |               | 0.17          |               |
| Odisha           |               |               |               |               |
| Himachal Pradesh |               | 0.01          | 0.33          | 0.03          |
| Chandigarh       |               | 0.12          |               | 0.11          |
| West Bengal      |               |               |               |               |
| Chhattisgarh     |               |               |               |               |
| Andhra Pradesh   |               |               |               |               |
| Assam            |               |               |               |               |
| Telangana        |               |               |               |               |
| Others           | 0.50          |               | 0.00          |               |
| All IndiaTotal : | 357.00        | 341.33        | 442.49        | 389.93        |

*******