**Executive Summary**
This document is a response to the Lok Sabha Unstarred Question No. 1600, concerning the implementation of a legally guaranteed Minimum Support Price (MSP) for farmers. The response details the current system of MSP determination based on the recommendations of the Commission for Agricultural Costs & Prices (CACP) and procurement methods. It also provides data on procurement and MSP value paid to farmers during the 2024-25 crop year.
**Key Points / Main Content**
* **MSP Determination:**
* The government fixes MSPs annually for 22 mandated agricultural crops.
* The process is based on CACP recommendations, considering the views of State Governments and Central Ministries/Departments.
* **MSP Levels:**
* The Union Budget for 2018-19 announced keeping MSPs at levels of at least one and a half times the cost of production.
* The government 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.
* **Procurement Methods:**
* The government procures cereals and coarse cereals through Food Corporation of India (FCI) and other designated State Agencies.
* Procurement of pulses, oilseeds, and copra is done under the Price Support Scheme, part of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), in consultation with State Governments.
* National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Co-operative Consumers' Federation of India Ltd. (NCCF) are procurement agencies under PM-AASHA.
* Cotton and Jute are procured by Cotton Corporation of India (CCI) and Jute Corporation of India (JCI), respectively.
* **Farmer Options:**
* Farmers have the option to sell their produce to government agencies or in the open market.
* **Procurement and MSP Data (2024-25 Crop Year):**
* Total Procurement: 1,223 LMT
* Total MSP Value: 3.47 Lakh Crore
**Impact Analysis**
**Stakeholder: Farmers**
* **Impact:** Benefit from MSP and various procurement schemes, providing price support for their crops.
* **Action Required:** Can choose to sell produce to government agencies at MSP or in the open market, depending on which is more advantageous.
**Stakeholder: State Governments**
* **Impact:** Involvement in MSP determination through consultations and operation of procurement schemes.
* **Action Required:** Consult with the central government for the operation of procurement schemes.
**Stakeholder: Central Government**
* **Impact:** Setting of MSP, organizing procurement and managing the financial burden.
* **Action Required:** Continues to fix MSPs for mandated agricultural crops and oversee procurement operations.
Key Entities Referenced
Minimum Support Price (MSP): A price floor set by the government to protect farmers from low market prices; the policy under discussion.
Ministry of Agriculture and Farmers Welfare: The primary government body responsible for agricultural policies, including MSP.
Commission for Agricultural Costs & Prices (CACP): The advisory body that recommends MSPs for various crops to the government.
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA): An umbrella scheme for procurement of pulses, oilseeds and copra when their market price falls below MSP.
Food Corporation of India (FCI): The primary agency responsible for procuring and distributing food grains under the MSP policy.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION NO. 1600
TO BE ANSWERED ON THE 09TH DECEMBER, 2025
IMPLEMENTATION OF LEGALLY GUARANTEED MSP
1600. SHRI E T MOHAMMED BASHEER
Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ िष एवं िकसान क(cid:670)ाण मं(cid:361)ी be
pleased to state:
(a) the final decision and likely timeline for providing a legal guarantee for Minimum Support
Price (MSP) to farmers;
(b) the details of mechanisms that are being considered to ensure effective implementation
and monitoring of a legally guaranteed MSP across different States and crops; and
(c) the manner in which a legal MSP guarantee impact procurement systems, market prices
and the financial burden on the exchequer?
ANSWER
MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE
कृ िष एवं िकसान क(cid:670)ाण रा(cid:475)मं(cid:361)ी (SHRI RAMNATH THAKUR)
(a) to (c): Every year, Government fixes Minimum Support Prices (MSPs) for 22 mandated
agricultural crops based on the recommendations of the Commission for Agricultural Costs &
Prices (CACP), after considering the views of the State Governments and Central
Ministries/Departments concerned.
The Union Budget for 2018-19 had announced the pre-determined principle to keep
MSPs at levels of at least 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 realize the objectives of MSP Policy, after announcement of MSP, Government
procures cereals and coarse cereals through Food Corporation of India
(FCI) and other designated State Agencies to provide price support to the farmers.
Procurement of pulses, oilseeds and copra is done under Price Support Scheme under
Umbrella Scheme of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), in
consultation with the concerned State Government as and when market price of these
produce fall below the MSP. Procurement agencies under PM-AASHA Scheme are National
Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Co-
operative Consumers' Federation of India Ltd. (NCCF). Cotton and Jute are also procured by
Government at MSP through Cotton Corporation of India (CCI) and Jute Corporation of India
(JCI), respectively.Government offers to procure agricultural crops through designated procurement
agencies and farmers have the option to sell their produce to the government agencies or in
the open market whichever is advantageous to them.
Increased MSP has benefited farmers of the country which are evident from data of
procurement and MSP amount paid to the farmers. The details of procurement and MSP
amount paid to farmers during 2024-25 (Crop Year) are given as under:
Total Procurement (In LMT) Total MSP Value (In Lakh Crore)
1,223 3.47
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