Lok Sabha Question No. 27 (STARRED), answered on 2025-02-04
Subject: WTO Restrictions on MSP
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Saptagiri Sankar Ulaka

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

## LOK SABHA STARRED QUESTION NO. 27

TO BE ANSWERED ON THE 04 TH  FEBRUARY, 2025

## WTO RESTRICTIONS ON MSP

* 27. SHRI SAPTAGIRI SANKAR ULAKA:

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

- (a) whether  the  Government  has  taken  steps  to  protect  small  farmers  from  WTOimposed restrictions on MSP and subsidies, if so, the details thereof;
- (b) the steps taken to safeguard India's Public Distribution System (PDS) from WTO challenges;
- (c) whether  alternative  trade  policies  or  agreements  have  been  explored  to  shield Indian agriculture from global competition and if so, the details thereof; and
- (d) the details of the budget allocated for subsidies, MSP and trade negotiations along with their impact on small farmers' income during the last five years?

## ANSWER

THE MINISTER OF AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण मंũी (SHRI SHIVRAJ SINGH CHOUHAN)

- (a)  to (d): A statement is laid on the Table of the House.

## STATEMENT  REFERRED  TO  IN  REPLY  TO  PARTS  (a)  TO  (d)  OF  LOK  SABHA STARRED  QUESTION  NO.  27  FOR  04 TH   FEBRUARY,  2025  REGARDING  'WTO RESTRICTIONS ON MSP'.

(a) to (d): The  Government  has  taken  several  steps  to  protect  the  interest  of  the farmers including small farmers in the context of WTO provisions on domestic support and subsidies.

Agriculture  being  a  State  Subject,  the  State  Governments  adopt  appropriate measures  for  development  of  agriculture  in  the  State.  However,  Government  of  India supplements the efforts of States through appropriate policy measures, budgetary support and various schemes/ programmes. The various schemes/ programmes  of the Government  of  India  are  meant  for  enhancing  the  welfare  of  farmers  by  increasing production, remunerative returns and income support to the farmers. Enhanced budgetary provisions have been made to facilitate the efforts of the Government.

Government fixes Minimum Support Prices (MSPs) for 22 mandated agricultural crops  and  Fair  &  Remunerative  Price  (FRP)  for  sugarcane  on  the  basis  of  the recommendations of the Commission for Agricultural Costs & Prices (CACP) to ensure that farmers receive remunerative prices for their produce, thereby encouraging greater investment and production. Since 2018-19, Government has been fixing MSP with the minimum return of 50% over all India weighted average cost of production.  The total MSP value paid to farmers from 2019-20 to 2023-24 is as under:

| Year                                            | 2019-20   | 2020-21   | 2021-22   | 2022-23   | 2023-24   |
|-------------------------------------------------|-----------|-----------|-----------|-----------|-----------|
| MSP value paid to farmers (Amount in Rs. Crore) | 2,55,949  | 2,80,167  | 2,73,092  | 2,37,492  | 2,48,960  |

In  year  2024-25  (till  26.01.2025),  22,48,725  and  76,84,886  number  of  farmers benefitted by procuring of wheat and paddy, respectively.

Financial  support  for  farmers  including  small  farmers  is  also  provided  through schemes like the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA) and the Pradhan Mantri Kisan Samman Nidhi (PM KISAN), ensuring continued government procurement and food distribution while adhering to WTO guidelines.

During  the  Rabi  2023-24  season,  under  PM-AASHA,  6.41  lakh  metric  tones  of pulses  of  Rs.4,820  crore  of  MSP  value  were  procured  from  2.75  lakh  farmers  which included procurement of 2.49 lakh metric tones of Masoor, 43,000  metric tones of Chana and 3.48 Lakh metric tones of Moong at MSP to support the farmers.  Similarly, 12.19 lakh metric tones of Oilseeds of Rs. 6,900 crore of MSP value were procured from 5.29 lakh farmers.

India has proactively employed a combination of trade policies such as the recent increase  in  import  duty  on  edible  oils,  removal  of  export  duty  from  rice  and  onion, agricultural reforms such as National Agriculture Market (eNAM), and schemes such as Pradhan  Mantri  Fasal  Bima  Yojana  (PMFBY),  Agriculture  Infrastructure  Fund  (AIF), National Mission for Sustainable Agriculture (NMSA), Pradhan Mantri Krishi Sinchayee Yojana  (PMKSY),  etc.  to  improve  the  competitiveness  of  its  agriculture  by  balancing domestic needs, and international commitments. India has aimed to protect its farmers, ensure  food  security,  and  maintain  a  sustainable  agricultural  sector  in  a  globalized economy. India has also been engaging in Free Trade Agreements (bilateral and regional) to  promote  and  diversify  agricultural  exports  while  protecting  its  agricultural  interests. These agreements often have provisions that ensure flexibility in agricultural subsidies, provide safeguards, or enable the imposition of tariffs on agricultural products.

The Central Government expenditure on food and fertilizer subsidies and Central Government expenditure on Agri & Allied  Activities  during  2020-21  to  2024-25  are  as follows: (Amount in Rs. In Crore)

|   Sl. No. | Year             | Fertilizer Subsidy   | Food Subsidy   | Agriculture and Allied Activities   |
|-----------|------------------|----------------------|----------------|-------------------------------------|
|         1 | 2020-21 (Actual) | 1,27,922             | 5,41,330       | 1,34,420                            |
|         2 | 2021-22 (Actual) | 1,53,758             | 2,88,969       | 1,43,317                            |
|         3 | 2022-23 (Actual) | 2,51,339             | 2,72,802       | 1,25,875                            |
|         4 | 2023-24 (RE)     | 1,88,894             | 2,12,332       | 1,40,533                            |
|         5 | 2024-25 (BE)     | 1,64,000             | 2,05,250       | 1,51,851                            |

Source: Budget Document 2022-23, 2023-24 and 2024-25

Implementation  of  various  schemes  has  yielded  remarkable  results  towards augmenting the income of the farmers. The Situation Assessment Survey (SAS) is carried out by the National Statistical Organization (NSO) at certain intervals. The last available estimates on income of agricultural household are based on the Situation Assessment Survey of Agricultural Households conducted by National Sample Survey Office (NSSO) during  77th  round  (January  -  December  2019).  As  per  the  survey,  estimated  average monthly income per agricultural household as obtained from NSS 70th round (2012-13) and NSS 77th round (2018-19) was Rs. 6,426 and Rs. 10,218, respectively.

As per the World Trade Organisation (WTO)'s Agreement on Agriculture (AoA), all the  Members can  provide  Market Price Support  (MPS) which includes  procurement  of crops by Government at Applied Administered Prices i.e. Minimum Support Price (MSP) in case of India. Such support is required to be notified to the WTO on an annual basis. Further,  it  needs  to  be  ensured  that  being  a  developing  country  member  the  productspecific support should be within the de-minimis limit i.e., 10% of the Value of Production of  the  respective  crop.  Similar de-minimis  limit  of  10%  also  applies  to  the  non-product specific support across the agriculture sector.

The  Public  Stockholding  (PSH)  programmes  for  food  security  purposes  for specified crops presently get covered under a 'Peace Clause', prescribed in the WTO's Bali  Ministerial  Decision  (2013)  popularly  known  as  'Bali  Peace  Clause'  which  allows exceeding the product-specific de-minimis limit by developing country Members, subject to certain conditions.

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