Lok Sabha Question No. 2912 (UNSTARRED), answered on 2016-03-15
Subject: Difference between Sale Price and MSP of Agricultural Produce
Ministry: AGRICULTURE AND FARMERS WELFARE
Asked by: PRATAPRAO GANPATRAO JADHAV

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

## LOK  SABHA

## UNSTARRED QUESTION NO.2912

TO BE ANSWERED ON THE 15 TH   MARCH, 2016

## DIFFERENCE BETWEEN SALE PRICE AND MSP OF AGRICULTURAL PRODUCE

2912.    SHRI PRATAPRAO JADHAV:

Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ ष एवं कसान कयाण मंी be pleased to state:

- (a) whether  there  is  a  vast  difference  between  MSP  of  the  agricultural  products  and  their selling price in the markets;
- (b) if so, the reasons therefor along with the reaction of the Government thereto;
- (c) whether the farmers are getting low price for their crops/produce while the consumers are bound to pay more prices for the crops/produce due to the said difference; and
- (d) if  so,  the  steps taken by the Government to remove the role of middlemen so that the farmers  could  get  more  prices  for  their  crops/produce  and  the  consumers  could  get  the agricultural products at low prices?

## ANSWER

## MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE

कृ ष एवं कसान कयाण मंालय म राय मंी (SHRI  MOHANBHAI  KUNDARIYA)

(a) to (d): The difference between farm gate/wholesale and consumer price depends on the type  of  marketing  channels  agricultural  produce  has  passed  through  to  reach  the  consumer. Government announces Minimum Support Price (MSP) for 23 agricultural commodities with the objective to ensure minimum remunerative guaranteed price to the farmers, while keeping the option open for them to sell in the markets, if prices are favourable.  Stocks so procured at MSP under Price Support Scheme (PSS) are mainly distributed through Targeted Public Distribution System  (TPDS)  and  other  government  schemes  on  subsidized  rates.  Alternatively,  when farmers sell their produce in wholesale regulated markets under the Agricultural Produce Market Committee  (APMC)  system  prevailing  in  the  States  and  Union  Territories,  such  produce normally passes through multiple handlings to reach the ultimate consumers, which is among the  factors  leading  to  increased  consumer's  price. This  price  gap  between the farm  gate and retail market price consequentially reduces farmer's share in consumer's rupee.

In order to enhance  farmer's  share in  consumer's  rupee and reduce  levels of intermediation in the supply  chain, specially  where unnecessary, the Government is  pursuing with the States to reform their respective marketing laws to , inter alia, promote direct purchase of  agricultural  produce  from  farmers  at  their  farm  gate  and  setting  up  of  farmers'  market, wherein farmers can sell their produce directly to consumers without involvement of middlemen. Further,  Government  has  recently  introduced  a  scheme  'Promotion  of  National  Agricultural Market  (NAM)  through  Agritech  Infrastructure  Fund  (ATIF)'  to  promote  on-line  trading  of agricultural produce through a common e-market platform across the country. This will protect the  interests  of  farmers  by  streamlining  procedures  and  thereby  reducing  unnecessary intermediation,  ensuring  transparent  auction  processes,  real  time  price  discovery  and  online payment  facility  etc.  and  at  the  same  time  will  ensure  more  reasonable  prices  for  quality produce to the consumers.

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