Lok Sabha Question No. 2633 (UNSTARRED), answered on 2021-12-14
Subject: MSP and Cost of Production
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Sunil Kumar Mondal, Abdul Majeed Ariff, Sarmistha Sethi, D. M. Kathir Anand, Dr. T. Sumathy (a) Thamizhachi Thangapandian

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

## LOK SABHA UNSTARRED QUESTION NO. 2633

TO BE ANSWERED ON THE 14 th  DECEMBER, 2021

## MSP AND COST OF PRODUCTION

## 2633.        SHRI SUNIL KUMAR MONDAL:

ADV.  A.M. ARIFF:

SHRIMATI  SARMISTHA SETHI:

SHRI  D.M. KATHIR ANAND:

DR. T. SUMATHY (a)  THAMIZHACHI THANGAPANDIAN:

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

- (a) the effective measures taken by the Union Government to support the farmers as the cost incurred for farming has doubled in the recent years;
- (b)  the  steps  taken  by  the  Government  to  double  their  income  and  reduce  the  cost  of agricultural inputs;
- (c)  the  details  of  the  action  taken/being  taken  by  the  Government  regarding  Minimum Support  Price  (MSP)  which  has  not  increased  in  proportion  to  the  increase  in  cost  of production;
- (d) if so, the details thereof and if not, the reasons therefor;
- (e) the steps taken by the Government to provide MSP for all agricultural produce;
- (f) whether the Government has undertaken any studies to review the mechanism of MSP in the recent past, if so, the details thereof; and
- (g)  whether  the  Government  will  constitute  a  committee  for  exploring  the  possibility  of giving legal guarantee for MSP and if not, the reasons therefor?

## ANSWER

## THE MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंी ( SHRI NARENDRA SINGH TOMAR)

- (a) to (e):    Government fixes Minimum Support Prices (MSP) for 22 mandated agricultural crops on the basis of the recommendations of the Commission for Agricultural Costs and Prices  (CACP),  and  after  considering  the  views  of  State  Governments  and  Central Ministries/Departments concerned and other relevant factors.

Cost  of  production  is  one  of  the  important  factors  in  the  determination  of  MSP. While  recommending  its  price  policy,  the  CACP  considers  all  costs  in  a  comprehensive manner.  CACP  projects  the  cost  of  cultivation  for  the  current  year  on  the  basis  of Composite Input Price Index (CIPI) which measures the change in input price over previous year. The  CIPIs  are  based  on  latest  prices  of  major  inputs  like  human  labour,  bullock labour, machine labour, fertilisers and manures, seeds, pesticides and irrigation as per data available from different ministries/ departments.

The  Government  in  its  Union  Budget  for  2018-19  had  announced  the  predetermined principle to keep 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. Details of MSP, cost and return over cost since 2018-19 are given at Annex.

Moreover,  Government  has  taken  several  steps  to  enhance  farmer's  income which include,  Pradhan Mantri Kisan Samman Nidhi (PM-KISAN), Pradhan Mantri Krishi Sinchayee Yojana (PMKSY), Soil Health Card (SHC), e-NAM, Pradhan Mantri Fasal Bima Yojana  (PMFBY),  Pradhan  Mantri  Annadata  Aay  Sanrakshan  Abhiyan'(PM-AASHA), Agriculture Infrastructure Fund, interest subvention scheme on crop loans among others.

(f)  &  (g):          The  NITI  Aayog  (erstwhile  Planning  Commission)  has  conducted  a  study entitled  'Efficacy  of  minimum  support  prices  on  farmers',  2016.  The  study  covered  14 States, 36 Districts, 72 Blocks, 144 Villages and 1440 Households. The study is based on both the primary and secondary data. The study has 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.

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. It aims to service the National Food Security Act (NFSA) and other welfare schemes of the Government so that subsidized food grains are supplied to the poor and needy, and to build up buffer stocks of food grains to ensure food grain security.

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  prescribed  guidelines  at  MSP  in  consultation  with  the  concerned State Government.

## Annex referred to in reply to part (a) to (e) of Lok Sabha Unstarred Question No. 2633 due for reply on 14.12.2021

## Minimum Support Price (MSP), cost and return over cost

|         |                  |               | 2018-19   | 2018-19   | 2018-19            | 2019-20   | 2019-20   | 2019-20            |
|---------|------------------|---------------|-----------|-----------|--------------------|-----------|-----------|--------------------|
| Sl. No. | Commodity        | Variety       | Cost      | MSP       | % Return over Cost | Cost      | MSP       | % Return over Cost |
|         | KHARIF CROPS     |               |           |           |                    |           |           |                    |
| 1       | PADDY            | Common        | 1166      | 1750      | 50                 | 1208      | 1815      | 50                 |
|         |                  | Grade 'A' ^   | -         | 1770      | -                  | -         | 1835      | -                  |
| 2       | JOWAR            | Hybrid        | 1619      | 2430      | 50                 | 1698      | 2550      | 50                 |
|         |                  | Maldandi ^    | -         | 2450      | -                  | -         | 2570      | -                  |
| 3       | BAJRA            |               | 990       | 1950      | 97                 | 1083      | 2000      | 85                 |
| 4       | RAGI             |               | 1931      | 2897      | 50                 | 2100      | 3150      | 50                 |
| 5       | MAIZE            |               | 1131      | 1700      | 50                 | 1171      | 1760      | 50                 |
| 6       | TUR (ARHAR)      |               | 3432      | 5675      | 65                 | 3636      | 5800      | 60                 |
| 7       | MOONG            |               | 4650      | 6975      | 50                 | 4699      | 7050      | 50                 |
| 8       | URAD             |               | 3438      | 5600      | 63                 | 3477      | 5700      | 64                 |
| 9       | COTTON           | Medium Staple | 3433      | 5150      | 50                 | 3501      | 5255      | 50                 |
|         |                  | Long Staple ^ | -         | 5450      | -                  | -         | 5550      | -                  |
| 10      | GROUNDNUT        |               | 3260      | 4890      | 50                 | 3394      | 5090      | 50                 |
| 11      | SUNFLOWER SEED   |               | 3592      | 5388      | 50                 | 3767      | 5650      | 50                 |
| 12      | SOYABEAN         | Yellow        | 2266      | 3399      | 50                 | 2473      | 3710      | 50                 |
| 13      | SESAMUM          |               | 4166      | 6249      | 50                 | 4322      | 6485      | 50                 |
| 14      | NIGERSEED        |               | 3918      | 5877      | 50                 | 3960      | 5940      | 50                 |
|         | RABI CROPS       |               |           |           |                    |           |           |                    |
| 15      | WHEAT            |               | 866       | 1840      | 112                | 923       | 1925      | 109                |
| 16      | BARLEY           |               | 860       | 1440      | 67                 | 919       | 1525      | 66                 |
| 17      | GRAM             |               | 2637      | 4620      | 75                 | 2801      | 4875      | 74                 |
| 18      | MASUR (LENTIL)   |               | 2532      | 4475      | 77                 | 2727      | 4800      | 76                 |
| 19      | RAPESEED/MUSTARD |               | 2212      | 4200      | 90                 | 2323      | 4425      | 90                 |
| 20      | SAFFLOWER        |               | 3294      | 4945      | 50                 | 3470      | 5215      | 50                 |
|         | OTHER CROPS      |               |           |           |                    |           |           |                    |
| 21      | COPRA            | Milling       | 5007      | 7511      | 50                 | 6347      | 9521      | 50                 |
|         | (Calendar Year)  | Ball ^        | -         | 7750      | -                  | -         | 9920      | -                  |
| 22      | JUTE             |               | 2267      | 3700      | 63                 | 2535      | 3950      | 56                 |

(Rs. per quintal)

Contd.

## Minimum Support Price (MSP), cost and return over cost

|         |                  |               | 2020-21   | 2020-21   | 2020-21            | 2021-22   | 2021-22   | 2021-22            |
|---------|------------------|---------------|-----------|-----------|--------------------|-----------|-----------|--------------------|
| Sl. No. | Commodity        | Variety       | Cost      | MSP       | % Return over Cost | Cost      | MSP       | % Return over Cost |
|         | KHARIF CROPS     |               |           |           |                    |           |           |                    |
| 1       | PADDY            | Common        | 1245      | 1868      | 50                 | 1293      | 1940      | 50                 |
|         |                  | Grade 'A' ^   | -         | 1888      | -                  | -         | 1960      | -                  |
| 2       | JOWAR            | Hybrid        | 1746      | 2620      | 50                 | 1825      | 2738      | 50                 |
|         |                  | Maldandi ^    | -         | 2640      | -                  | -         | 2758      | -                  |
| 3       | BAJRA            |               | 1175      | 2150      | 83                 | 1213      | 2250      | 85                 |
| 4       | RAGI             |               | 2194      | 3295      | 50                 | 2251      | 3377      | 50                 |
| 5       | MAIZE            |               | 1213      | 1850      | 53                 | 1246      | 1870      | 50                 |
| 6       | TUR (ARHAR)      |               | 3796      | 6000      | 58                 | 3886      | 6300      | 62                 |
| 7       | MOONG            |               | 4797      | 7196      | 50                 | 4850      | 7275      | 50                 |
| 8       | URAD             |               | 3660      | 6000      | 64                 | 3816      | 6300      | 65                 |
| 9       | COTTON           | Medium Staple | 3676      | 5515      | 50                 | 3817      | 5726      | 50                 |
|         |                  | Long Staple ^ | -         | 5825      | -                  | -         | 6025      | -                  |
| 10      | GROUNDNUT        |               | 3515      | 5275      | 50                 | 3699      | 5550      | 50                 |
| 11      | SUNFLOWER SEED   |               | 3921      | 5885      | 50                 | 4010      | 6015      | 50                 |
| 12      | SOYABEAN         | Yellow        | 2587      | 3880      | 50                 | 2633      | 3950      | 50                 |
| 13      | SESAMUM          |               | 4570      | 6855      | 50                 | 4871      | 7307      | 50                 |
| 14      | NIGERSEED        |               | 4462      | 6695      | 50                 | 4620      | 6930      | 50                 |
|         | RABI CROPS       |               |           |           |                    |           |           |                    |
| 15      | WHEAT            |               | 960       | 1975      | 106                | 1008      | 2015      | 100                |
| 16      | BARLEY           |               | 971       | 1600      | 65                 | 1019      | 1635      | 60                 |
| 17      | GRAM             |               | 2866      | 5100      | 78                 | 3004      | 5230      | 74                 |
| 18      | MASUR (LENTIL)   |               | 2864      | 5100      | 78                 | 3079      | 5500      | 79                 |
| 19      | RAPESEED/MUSTARD |               | 2415      | 4650      | 93                 | 2523      | 5050      | 100                |
| 20      | SAFFLOWER        |               | 3551      | 5327      | 50                 | 3627      | 5441      | 50                 |
|         | OTHER CROPS      |               |           |           |                    |           |           |                    |
| 21      | COPRA            | Milling       | 6639      | 9960      | 50                 | 6805      | 10335     | 52                 |
|         | (Calendar Year)  | Ball ^        | -         | 10300     | -                  | -         | 10600     | -                  |
| 22      | JUTE             |               | 2709      | 4225      | 56                 | 2832      | 4500      | 59                 |

## Annex

(Rs. per quintal)

^ Cost data are not available for Paddy (Grade A), Jower (Maldandi), Cotton (Long staple) and Copra (Ball).

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