Lok Sabha Question No. 70 (STARRED), answered on 2016-03-01
Subject: MSP for Agricultural Produce
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: DODDAALAHALLI KEMPEGOWDA SURESH, C.R. CHAUDHARY

## GOVERNMENT OF INDIA MINISTRY OF AGRICULTURE AND FARMERS WELFARE DEPARTMENT OF AGRICULTURE, COOPERATION & FARMERS WELFARE

## LOK  SABHA STARRED QUESTION NO. 70

TO BE ANSWERED ON THE 1 ST  MARCH, 2016

## MSP FOR AGRICULTURAL PRODUCE

- *70.      SHRI D.K. SURESH: SHRI C.R. CHAUDHARY:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ षि एवं ककसान कल्याण ½ãâ¨ããè be pleased to state:

- (a) whether the  Government  is  aware  that  the  benefits  of  Government  Schemes  and Policies including Minimum Support Price (MSP) is not reaching the intended farmers, if so, the details thereof including the number and percentage of farmers benefited thereunder;
- (b) whether a large number of farmers are bereft of such schemes/policies, if so, the details thereof and the steps taken by the Government in this regard;
- (c) whether agriculture is becoming unremunerative for small and marginal farmers on account of  steep  rise  in  the  cost  of  agricultural  inputs,  environmental  risk  factors  on  the crops, if so, the details thereof along with the steps taken or proposed to be taken by the Government to moderate and bring down the production cost;
- (d) whether any comparative study has been commissioned to examine the input cost for  cultivation  of  major  crops,  risk  factor  vis-a-vis  MSP  fixed  for  each  crop  and  if  so,  the details thereof; and
- (e) whether the National Commission on Farmers had recommended that the MSP of agricultural produce should be atleast 50 per cent more than the weighted average cost of production and if so, the steps taken by the Government to implement the recommendations made by the National Commission on Farmers and provide maximum benefit to the farmers?

## ANSWER

MINISTER OF AGRICULTURE AND FARMERS WELFARE

कृ षि एवं ककसान कल्याण ½ãâ¨ããè

(SHRI RADHA MOHAN SINGH)

- (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.   70  DUE FOR REPLY ON 1 ST  MARCH, 2016.

(a) to (e):     Government fixes Minimum Support Prices (MSPs) of 23 major crops on the recommendations of the Commission for Agricultural Costs & Prices (CACP), views of State Governments and Central Ministries/Departments and other relevant factors. The objective of  the  Government's  price  policy  is  to  ensure  remunerative  prices  to  farmers  for  their produce.  However  farmers  are  free  to  sell  their  produce  to  Government  procurement agencies or in the open market as is advantageous to them. State Governments are alerted from time to time to make adequate arrangements to ensure MSP to farmers.

A study conducted by NITI Aayog on efficacy of MSP has found that MSP declared by  the  Government  has  encouraged  78  %  of  the  farmers  covered  under  the  study  for adopting  improved  methods  of  farming  such  as  high  yielding  varieties  of  seeds,  organic manure,  chemical  fertilizer,  pesticides  and  improved  methods  of  harvesting  etc.  due  to remunerative  price.  The  study  has  also  revealed  that  majority  of  farm  households  are  in favour of MSP since it ensures guaranteed income to the farmers by acting as a floor price.

Government  is  implementing  Comprehensive  Scheme  for  Studying  the  Cost  of Cultivation of Principal Crops for estimating cost of cultivation for major crops. Cost data are collected with the help of State Agricultural Universities/Institutions located in various states. The cost estimates are taken into consideration by CACP while recommending MSPs.

Agriculture is a state subject. However, the Government of India implements several Schemes to supplement the efforts of State Governments with the objective of improving productivity  which  would  provide  higher  returns  to  farmers  including  small  and  marginal farmers. Major schemes implemented   by Government are Soil Health Card (SHC) scheme;

-2- promotion of use of Neem Coated Urea; Parampragat Krishi Vikas Yojana (PKVY); Pradhan Mantri Krishi Sinchai Yojana (PMKSY); National Food Security Mission (NFSM); Mission for Integrated  Development  of  Horticulture  (MIDH);  National  Mission  on  Oilseeds  &  Oilpalm (NMOOP);  National  Mission  for  Sustainable  Agriculture  (NMSA);  National  Mission  on Agricultural  Extension  &  Technology  (NMAET);  Pradhan  Mantri  Fasal  Bima  Yojana (PMFBY);  Unified  National  Agriculture  Markets;  Kisan  Credit  Card  (KCC)  and  Rashtriya Krishi  Vikas  Yojana  (RKVY)  etc.  These  schemes  are  implemented  through  the  State Governments  and  the  State  Governments  have  been  advised  to  ensure  that  benefits  of schemes reach to the maximum number of farmers.

The  National  Commission  on  Farmers  under  the  Chairmanship  of  Prof.  M.S. Swaminathan had recommended that the Minimum Support Price (MSP) should be at least 50% more than the weighted average cost of production.  This recommendation, however, has not been accepted by the Government because MSP is recommended by CACP based on  objective  criteria  and  considering  variety  of  relevant  factors.    Hence,  prescribing  an increase of at least 50% on cost may distort market.  Government is implementing various schemes, as already mentioned, with a view to increase productivity which ensures higher returns to farmers.

Government  has fixed MSP for the major foodgrains namely Paddy and Wheat at Rs.1410 per quintal (Paddy Common), Rs.1450 per quintal (Paddy Grade 'A') and Rs. 1525 per quintal for wheat for 2015-16 season. This provides a return of 38.24 percent in case of paddy and 94.27 percent in case of wheat over all India weighted average paid out cost of production including family labour (A2+FL).

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