Lok Sabha Question No. 361 (UNSTARRED), answered on 2023-12-05
Subject: New Formula for MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Ramya  Haridas, S. Venkatesan

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

## LOK SABHA UNSTARRED QUESTION NO. 361

TO BE ANSWERED ON THE 05 TH  DECEMBER, 2023

## NEW FORMULA FOR MSP

361. MS. RAMYA HARIDAS: SHRI S. VENKATESAN: Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ͪष एवं ͩकसान कãयाण मंğी be pleased to state: (a) whether the Government is providing Minimum Support Price (MSP) for all agricultural products as per C2 plus 50 per cent formula recommended by Swaminathan Commission; (b) if not, the time by which the Government would provide the MSP to farmers as per C2 plus 50 per cent formula; (c) whether the Government has taken any note of Farmers frustration that it has not kept it's promise given to them to call off their Delhi protest in November 2021; (d)  if  so,  the  progress  made  in  ensuring  MSP  at  C2  +  50%  as  recommended  by  the Committee  headed  by  renowned  Agricultural  scientist  M.S.  Swaminathan  and  the  likely MSP for the important agricultural products if C2 + 50 is applied and actual MSP given as of now; (e) whether farmers are compelled to leave their unremunerative profession and thereafter to facilitate the big corporates to acquire their lands and agriculture of the country; and (f) if so, the details thereof and the reasons therefor?

## ANSWER

## THE MINISTER OF AGRICULTURE AND FARMERS WELFARE

## कृ ͪष एवं ͩकसान कãयाण मंğी (SHRI NARENDRA SINGH TOMAR)

(a)  to  (f):  Government  fixes  minimum support prices (MSPs) for 22 mandated agricultural crops  viz.  paddy,  jowar,  bajra,  maize,  ragi,  arhar,  moong,  urad,  groundnut,  soyabean, sunflower, sesamum, nigerseed, cotton, wheat, barley, gram, masur (lentil), rapeseed/mustard,  safflower,  jute  and  copra  and  Fair  &  Remunerative  Price  (FRP)  for sugarcane 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 and other relevant factors.

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 Cost of production is one of the important determinants of MSP and its estimation is based on the methodology recommended by Expert Committees from time to time. CACP projects  cost  for  ensuing  marketing  season  on  the  basis  of  actual  paid  out  costs  and imputed value of family labour and Composite Input Price Index (CIPI) which is based on latest  prices  of  major  inputs  like  human  labour,  bullock  labour,  machine  labour,  fertilisers and manures, seeds, pesticides and irrigation.

One of the recommendations of National Commission of Farmers (NCF), set up under the Chairmanship of Prof. M.S. Swaminathan, was that, Minimum Support Price (MSP) should be at least 50 percent more than the weighted average cost of production. Accordingly, 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 margin of atleast 50 per cent over all India weighted average cost of production from the agricultural year 2018-19 onwards.

Further, to realise the objective of MSP policy, 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. Additionally, Oilseeds, pulses and copra of Fair Average Quality (FAQ) are procured from registered farmers under Price Support  Scheme  under  Umbrella  Scheme  of  Pradhan  Mantri  Annadata  Aay  SanraksHan Abhiyan (PM-AASHA), as per its prescribed guidelines.

Moreover,  Government  has  adopted  and  implemented  several  policies,  developmental programmes, schemes and reforms for achieving higher incomes for the farmers, which are as follow:

- i. Supplementary income transfers under PM-KISAN of Rs. 6000/- per year in three equal instalments to eligible beneficiaries.
- ii. 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.
- iii. Crop insurance under Pradhan Mantri Fasal Bima Yojna (PMFBY).
- iv. Better access to irrigation under Pradhan Mantri Krishi Sinchayee Yojana (PMKSY).

v. Special attention for creation of infrastructure through Agri Infrastructure Fund (AIF) with a size of Rs. 100,000 crores. vi. New procurement policy under PM-AASHA in addition to FCI operations. vii. Kisan Credit Cards (KCC) offering production loan to even dairy & fishery farmers besides agricultural crops. viii. Formation and promotion of 10,000 Farmer Producer Organisations (FPO). ix. National Mission for Sustainable Agriculture (NMSA), which aims to evolve and implement strategies to make Indian agriculture more resilient to the changing climate. x. Adoption of drone technologies in agriculture which has potential to revolutionize the Indian Agriculture. xi. Benefits accruing under Bee-Keeping, Rashtriya Gokul Mission, Blue Revolution, Interest Subvention Scheme, Agro-forestry, Restructured Bamboo Mission, implementation of new  generation watershed guidelines, etc. xii. Focus on application of digital technology at all stages of agricultural value chain. xiii. Supply of fertilizer to farmer at subsidized price so as to reduce input cost.

- xiv.     Production and availability of quality seeds to farmers.
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