Lok Sabha Question No. 107 (STARRED), answered on 2024-07-30
Subject: MSP Infrastructure
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Shyamkumar Daulat Barve, Shri Omprakash Bhupalsinh Alias Pavan Rajenimbalkar

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

## LOK SABHA

## STARRED QUESTION NO. 107

TO BE ANSWERED ON 30 TH  JULY, 2024

## MSP INFRASTRUCTURE

## *107.  SHRI SHYAMKUMAR DAULAT BARVE: SHRI OMPRAKASH BHUPALSINH ALIAS PAVAN RAJENIMBALKAR:

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

(a)  whether  there  is  a  proposal  to  give  legal  guarantee  to  Minimum  SupportPrice  (MSP) asdemanded by the Farmers' Unions, if so, the details thereof and if not, the reasons therefor;

(b) whether MSP infrastructure is not available in some States and if so, the reasons therefor;

(c) whether there is a proposal to create MSP infrastructure in each State so that farmers caneasily  access the  godowns for their products, if so, the  details thereof and if not, the reasonstherefor;

(d) whether there is a need to ensure farmers get some easy credit so that they don't fall forthe middlemen's advance money trap which ultimately compels the farmers to sell their productsat low prices; and

- (e) if so, the steps taken by the Government in this regard?

## ANSWER

THE MINISTER OF AGRICULTURE AND FARMERS WELFARE

क ृ िष एवं िकसान कʞाण मंũी (SHRI SHIVRAJ SINGH CHOUHAN)

- (a) to (e): A Statement is laid on the Table of the House.

## STATEMENT REFERRED TO IN REPLY TO PARTS (a) to (e) OF LOK SABHA STARRED QUESTION  NO  107  DUE  FOR  ANSWER  ON  30 TH   JULY,  2024  REGARDING  'MSP INFRASTRUCTURE'

(a): The Government is committed that the full benefits of MSP reach the farmers of the country. Hence a committee has been constituted by the government to provide MSP to the farmers of the country and to give suggestions on making the system more effective and transparent.  Additionally,  the  Committee  was  asked  to  examine  the  feasibility  of  giving greater autonomy to the Commission for Agricultural Costs and Prices (CACP) and ways to make it more scientific; and with a view to ensuring higher prices, mandate has also been given  to  give  suggestions  for  strengthening  the  agricultural  marketing  system  as  per  the changing  needs  of  the  country.  This  committee  is  also  working  on  the  topics  of  natural farming  and  crop  diversification.  The  meetings  of  this  committee  are  being  organized regularly  and  since  July  22,  2022,  6  meetings  have  been  held  till  now.  Additionally,  35 meetings of various sub-committees have also been held on the above subjects.

(b) & (c):    In order to improve storage facilities, Government is implementing Agricultural Marketing  Infrastructure  (AMI),  a  sub-scheme  of  the  Integrated  Scheme  for  Agricultural Marketing  (ISAM)  under  which  assistance  is  provided  for  the  construction/  renovation  of godowns/ warehouses in the rural areas in the States to enhance the storage capacity for agriculture produce. Under the scheme, Government provides subsidy at the rate of 25% and 33.33 % on capital cost of the project based on the category of eligible beneficiary.

Since inception of scheme i.e. from 01.04.2001 and up to 30.06.2024, a total of 48,512 storage infrastructure projects (Godowns) in 27 States, with storage capacity of 940 Lakh Tonnes have been sanctioned under the scheme and subsidy of Rs. 4,734.73 crore has been released.

In  order  to  abridge  the  existing  infrastructure  gaps  and  mobilize  investment  in agriculture infrastructure, Agriculture Infrastructure Fund  (AIF) was  launched under Aatmanirbhar Bharat Package during July 2020. AIF is a medium - long term debt financing facility to be financed by lending institutions for investment in viable projects for post-harvest management infrastructure and community farming assets through incentives and financial support.

Under the scheme, ₹1 Lakh Crore loan is provided by banks and financial institutions with  the  interest  rate  capped  at  9%.  All  loans  under  this  financing  facility  have  interest subvention of 3% per annum up to a limit of ₹2 crores. This subvention is available for a maximum period of 7 years. In case of loans beyond ₹2 crores, interest subvention is limited up to ₹2 crores. As on 26.07.2024, ₹46,080 Crores have been sanctioned for 72,222 projects in 31 States/UTs  under  AIF. Major  projects  sanctioned under  AIF  include  13,469  warehouses, 3,021 sorting & grading units, 1852 cold store projects, around 20,338 other kinds of postharvest management projects and community farming assets. (d) & (e):     Government of India has taken several steps to enhance access to easy credit to  farmers.  Government  announces  annual  target  of  agriculture  credit  every  year.  The Ground Level Credit (GLC) has shown consistent progress over the year which has risen from 7.30 lakh crore in 2013-14 to 25.10 lakh crore in 2023-24. Government  is  providing  Kisan  Credit  Card  (KCC)  to  farmers  through  Banks  for improving easy access to agriculture credit so that farmers may use them to readily purchase agriculture inputs such as seeds, fertilizers, pesticides etc. and draw cash for their production needs. Government is implementing Modified Interest Subvention Scheme (MISS) with a view to provide short term Agri-loans through KCC to the farmers at concessional rate of interest. Under the scheme, farmers are given upfront interest subvention of 1.5%. Therefore, short term crop loan upto₹3.00 lakh become available to farmers engaged in Agriculture and other allied activities at an interest rate of 7%. Additional 3% subvention is also given to the farmers for prompt and timely repayment of loans; thus the effective rate of interest comes down to 4% per annum.Some State governments also top up the interest subsidy to bring it further down. With Government efforts institutional credit in agriculture has shown significant improvement which risen from 64% in 2013 to 75% in 2022. To protect the farmers against distress sale of their produce, the benefit of Interest subvention  (IS)  is  also  available  for  post-harvest  loans  against  Negotiable  Warehouse Receipts (NWRs) which is given at par with the interest subvention on crop loans for a further period of six months post-harvest to small and marginal farmers (SMFs) having Kisan Credit Cards (KCCs). In last 10 years the total amount of interest subvention released (from 2014 to 2024) is ₹144,673.76 crores.

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