Lok Sabha Question No. 2706 (UNSTARRED), answered on 2023-12-19
Subject: Price of Agricultural Inputs
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: M. Selvaraj

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

## LOK SABHA UNSTARRED QUESTION NO. 2706

TO BE ANSWERED ON THE 19 TH  DECEMBER, 2023

## PRICE OF AGRICULTURAL INPUTS

2706. SHRI M. SELVARAJ:

Will the Minister of AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण मंũी be pleased to state:

- (a)  whether the Government is aware of the fact that every year the prices of agriculture inputs like seeds, manure and fertilizers goes on increasing but at the same time the prices  of  agriculture  outputs  are  not  increasing  due  to  which  the  farmers  are  facing severe financial losses;
- (b)  if so, the details thereof;
- (c)  whether the Government will take necessary action to procure paddy at the rate of Rs. 4000/- per quintal;
- (d)  if so, the details thereof; and
- (e)  if not, the reasons therefor?

## ANSWER

## THE MINISTER OF AGRICULTURE AND FARMERS WELFARE

क ृ िष एवं िकसान कʞाण मंũी

(SHRI ARJUN MUNDA)

(a) to (e): The prices of various inputs like seeds, manure and fertilizers is reflected in the  cost  of  production  of  various  agricultural  commodities.  The  effect  of  rise  in  cost  of production of major crops is balanced through the mechanism of Minimum Support Prices that are fixed every year in order to enable farmers to receive reasonable return for their produce.

The Government fixes minimum support prices (MSPs) for 22 mandated agricultural crops  including  two  varieties  of  paddy  i.e.  Common  and  Grade  A,  on  the  basis  of  the recommendations  of  the  Commission  for  Agricultural  Costs  &  Prices  (CACP),  after considering the views of State Governments  and  Central Ministries/  Departments concerned.  While  recommending  MSPs,  CACP  considers  important  factors  like  cost  of production, overall demand-supply conditions, domestic and international prices, inter-crop 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.

The Union Budget for 2018-19 had announced the pre-determined principle to keep MSPs at levels of one and half times of the cost of production. Accordingly, Government had  increased  MSPs  for  all  mandated  Kharif,  Rabi  and  other  Commercial  crops  with  a minimum margin of 50 percent over all India weighted average cost of production from the year  2018-19  onwards. On  the  basis  of  above  mentioned  principle,  Government  had increased the MSPs for all mandated Kharif crops including paddy for the year 2023-24 on 7th June, 2023 and for all Rabi crops for the year 2023-24 on 18th October, 2023.

The  Government  has  initiated  several  steps  to  bring  down  cost  of  production  of agricultural commodities by promoting increase in productivity through efficient use of inputs like  quality  seeds,  manure  and  fertilizers,  irrigation,  machinery,  etc.  The  Government ensures fixation of price  of  uniform breeder seeds in consultation with Indian Council  of Agricultural Research (ICAR) for minimization of the cost of production of foundation and certified  seeds.  The  Sub-Mission  on  Seeds  &  Planting  Materials  (SMSP)  is  being implemented  from  the  year  2014-15  to  promote  production  and  multiplication  of  quality seeds of agricultural crops, so that the required quantities of seeds can be made available to farmers in the country. The Government is promoting Integrated Nutrient Management (INM)  for  balanced  and  judicious  use  of  chemical  fertilizers,  bio-fertilizers  and  locally available  organic  manures  like  farmyard  manure,  compost,  vermi  compost  and  green manure based on soil testing to maintain soil health and productivity.

The  State  Government  agencies  and  Food  Corporation  of  India  (FCI)  purchase wheat  &  paddy  with  prescribed  Fair  Average  Quality  (FAQ)  specifications  at  Minimum Support Price (MSP), (the latter for Central Pool) to ensure that farmers get remunerative prices for their produce and do not have to resort to distress sale. However, if producers / farmers get better price in comparison to MSP, they are free to sell their produce in open market.  Procurement  in  a  State  depends  not  only  upon  production  but  also  upon  other factors like marketable surplus, MSP, prevailing market rate, demand & supply situation and participation of private traders etc.

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