Lok Sabha Question No. 1441 (UNSTARRED), answered on 2022-07-26
Subject: Fixation of MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: S. Venkatesan

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE & FARMERS WELFARE

## DEPARTMENT OF AGRICULTURE & FARMERS WELFARE

## LOK SABHA

## UNSTARRED QUESTION NO.  1441

TO BE ANSWERED ON THE 26 TH  JULY, 2022

## FIXATION OF MSP

## 1441.  SHRI S. VENKATESAN:

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

- (a)  whether the Central Government has announced Minimum Support Price (MSP) at the rate of Rs 2,040 per quintal for paddy (Common) and Rs 2,060 per quintal for paddy (Grade A) for the kharif marketing season 2022-23, if so, the details of the cost projection submitted by State Governments, State-wise;
- (b)   whether the amount demanded by 14 out of 15 states was not considered and lower MSP was fixed, if so, the details thereof;
- (c)   whether the present announcement of MSP is according to the C2+50% formula as recommended by M.S Swaminathan Committee; and
- (d)   if so, the details thereof 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) & (b):    Government has fixed Minimum Support Prices (MSP) for Paddy (Common) and Paddy (Grade A) at ₹ 2,040 per quintal and ₹ 2,060 per quintal respectively, for Kharif Marketing Season (KMS) 2022-23, on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

While  recommending  MSPs,  CACP  considers  important  factors  like  cost  of production, overall demand-supply conditions, 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.  CACP  also  consult  concerned stakeholders including State Governments in this  process.  There  are  variations  in  the  cost  estimates  provided  by States/UT and CACP; the main reasons for these variations are different methodology and cost concept used by the States/UT and CACP. Some States include components such as management cost, transportation and marketing expenses, higher interest on working  capital  etc.  in  their  cost  estimation  whereas,  CACP  considers  A2+FL  cost, where A2 refers to all actual expenses in cash and kind incurred in production and rent paid for leased-in land, and FL refers to imputed value of Family Labour.

(c) & (d): M.S Swaminathan Committee has recommended, among others that the Minimum Support Price should be at least 50% more than the weighted average cost of 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, 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.

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