Lok Sabha Question No. 419 (UNSTARRED), answered on 2025-02-04
Subject: Proposal for Minimum Support Price Infrastructure
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: Shri Arvind Ganpat Sawant, Shri Sanjay Haribhau Jadhav, Shri Balwant Baswant Wankhade

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

## LOK SABHA UNSTARRED QUESTION NO. 419

TO BE ANSWERED ON THE 4 th  February, 2025

## PROPOSAL FOR MINIMUM SUPPORT PRICE INFRASTRUCTURE

## 419. SHRI ARVIND GANPAT SAWANT: SHRI SANJAY HARIBHAU JADHAV: SHRI BALWANT BASWANT WANKHADE:

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

- (a)  whether  the  Government  proposes  to  give  legal  guarantee  to  the  Minimum  Support Price  (MSP),  as  demanded  by  farmers'  unions,  if  so,  the  details  thereof  and  if  not,  the

reasons therefor; (b) whether there is a shortage of MSP infrastructure in some States, if so, the reasons therefor; (c)  whether  the  Government  proposes  to  create  MSP  related  infrastructure  in  all  the States  so  that  farmers  can  easily  trasport  their  produce  to  godowns,  if  so,  the  details thereof and if not, the reasons therefor; (d)  whether  providing  credit  facilities  to  farmers  is  necessary  so  that  they  are  not compelled to take advance money from middlemen and sell their produce at lower prices; and (e) if so, the steps taken by the Government in this regard?

## ANSWER

THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE क ृ िष एवं िकसान कʞाण राǛ मंũी ( SHRI RAM NATH THAKUR)

- (a): Every  year,  Government  fixes  Minimum  Support  Prices  (MSPs)  for  22  mandated agricultural  crops  for  the  country  as  a  whole,  based  on  the  recommendations  of Commission for Agricultural Costs & Prices (CACP), after considering the views of State Governments and Central Ministries/Departments concerned. The Union Budget for 201819 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 return of 50 percent over all India weighted average cost of production from year 2018-19 onwards.

To  make  Minimum  Support  Prices  (MSPs)  more  effective  and  transparent,  a committee has been constituted on 12thJuly 2022. The subject matter of the committee also  include  (i)  Suggestions  on  practicality  to  give  more  autonomy  to  Commission  for Agricultural Costs and Prices (CACP) and measures to make it more scientific, and (ii) To strengthen  the  Agricultural  Marketing  System  as  per  the  changing  requirements  of  the country to ensure higher value to the farmers through remunerative prices of their produce by  taking  advantage  of  the  domestic  and  export  opportunities.  The  meetings  of  this committee  are  being  organized  regularly  and  till  date,  6  meetings  have  been  held. Additionally, 39 meetings of various sub-committees have also been held.

(b) to  (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  31.10.2024,  a  total  of 48,611  storage  infrastructure  projects  (Godowns)in  27  States,  with  storage  capacity  of 9.44  crore  Metric  Tonnes  have  been  sanctioned  under  the  scheme  and  subsidy  of  Rs. 4795.47 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 interest 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 26.1.2025, Rs. 56334 Crore have been sanctioned for 92393 projects under AIF, out of this total sanctioned amount , ₹41996 crore is covered under scheme benefits. These sanctioned projects have mobilized an investment of Rs.91856 crores in agriculture sector.  Major projects sanctioned under AIF include 24,477  custom hiring centres, 19,030 primary processing units, 14,727 warehouses, 3,430 sorting & grading units, 2,190 cold store projects, around 28,539  other kinds of post-harvest management projects and viable 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  yearsand  is  atRs. 25.49 lakh crore in 2023-24.With Government efforts institutional credit in agriculture has shown significant improvement and is at 75% in 2022, as per survey reports. 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. 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).

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