Executive Summary:
This document is the Indian government's response to questions regarding the implementation of a legal guarantee for Minimum Support Prices (MSP) for all farmers and crops. It outlines the current MSP framework, efforts to improve its effectiveness, and studies conducted on its impact. Key dates include the constitution of a committee on MSPs on July 12, 2022, and data on procurement and MSP values up to June 30, 2025.
Key Points / Main Content:
Current MSP Framework:
* The government fixes MSPs annually for 22 mandated agricultural crops based on recommendations from the Commission for Agricultural Costs and Prices (CACP), considering input from State Governments and Central Ministries/Departments.
* Since 2018-19, MSPs have been set at levels of at least 1.5 times the cost of production.
* Increased MSPs have demonstrably benefited farmers, as evidenced by procurement data.
* Procurement and MSP values for MSP crops have been tracked, with total procurement in LMT and total MSP value in lakh Crore reported for 2020-21 through 2024-25 (as of June 30, 2025).
Efforts to Improve MSP Effectiveness:
* A committee was formed on July 12, 2022, to enhance the effectiveness and transparency of MSPs.
* The committee's mandate includes:
* Suggestions for granting greater autonomy to the CACP and making its methods more scientific.
* Strengthening the agricultural marketing system to ensure higher value for farmers through remunerative prices, leveraging domestic and export opportunities.
* The committee has held six meetings, with subcommittees holding an additional 39 meetings.
Assessment of MSP Impact:
* NITI Aayog conducted a study in 2016 on the efficacy of MSPs, covering 14 states, 36 districts, 72 blocks, 144 villages, and 1440 households.
* The study found that MSPs have encouraged 78% of farmers to adopt improved farming methods.
Impact Analysis:
Farmers:
Impact: Farmers benefit from the fixed MSPs, which aim to provide a minimum return of 50% over the cost of production. The increased MSPs encourage the adoption of improved farming methods.
Action Required: Farmers should stay informed about the MSPs for their crops and utilize available resources to improve their farming practices.
State Governments and Central Ministries/Departments:
Impact: State governments and central ministries/departments provide input to the CACP regarding the setting of MSPs.
Action Required: Continue to provide relevant input and collaborate with the CACP to ensure effective MSP implementation.
Commission for Agricultural Costs and Prices (CACP):
Impact: The CACP is responsible for recommending MSPs to the government.
Action Required: Continue to conduct thorough analyses and provide recommendations for MSPs based on relevant factors and data.
Committee on MSPs:
Impact: The committee is responsible for suggesting ways to improve the effectiveness and transparency of MSPs.
Action Required: The committee must continue to meet regularly and provide recommendations to strengthen the MSP system.
Key Entities Referenced
Ministry of Agriculture and Farmers Welfare: The Indian government ministry responsible for policies and programs related to agriculture and farmers' welfare.
Minimum Support Prices (MSPs): A form of market intervention by the Government of India to protect farmers from price fluctuations.
National Commission on Farmers Swaminathan Commission: A commission established to address the issues faced by farmers in India, recommending policy measures for their welfare.
West Bengal: A state in India where procurement of agricultural produce remains minimal.
Commission for Agricultural Costs and Prices (CACP): An advisory body that recommends Minimum Support Prices (MSPs) for agricultural commodities.
Union Budget for 2018-19: The annual financial statement of the Government of India, which announced a principle to keep MSPs at levels of at least one and half times of the cost of production.
National Institution for Transforming India (NITI Aayog): A policy think tank of the Government of India, which conducted a study on the efficacy of minimum support prices on farmers.
22 mandated agricultural crops: The number of crops for which the Government of India fixes Minimum Support Prices (MSPs) every year.
O.I.H.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION NO. 4279
TO BE ANSWERED ON THE 19TH AUGUST, 2025
LEGAL GUARANTEE FOR MSP
4279. SHRI AMRA RAM:
MS MAHUA MOITRA:
Will the Minister of AGRICULTURE AND FARMERS WELFARE कृ(cid:874)ष एवं (cid:873)कसान क(cid:227)याण
मं(cid:287)ी be pleased to state:
(a) whether the Government intends to introduce legislation providing a legal guarantee for
Minimum Support Prices (MSPs) for all farmers and all crops, as recommended by the
National Commission on Farmers (Swaminathan Commission);
(b) if so, the timeline for introducing legislation to guarantee MSP for all crops, ensuring fair
remuneration;
(c) if not, the reasons for the continued reliance on procurement-driven mechanisms that
currently cover less than 25% of agricultural produce nationally, with wide regional disparities;
and
(d) whether the Government has conducted assessments on how the absence of an MSP
guarantee contributes to agrarian distress, indebtedness, and price exploitation by
intermediaries, particularly in States like West Bengal where procurement remains minimal?
ANSWER
THE MINISTER OF STATE FOR AGRICULTURE AND FARMERS WELFARE
कृ(cid:874)ष एवं (cid:873)कसान क(cid:227)याण रा(cid:207)य म(cid:287)ं ी (SHRI RAMNATH THAKUR)
(a) to (c): Every year, Government fixes Minimum Support Prices (MSPs) for 22
mandated agricultural crops for the country as a whole, 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 Commercialcrops with a minimum return of 50 percent over all India weighted average cost of
production from year 2018-19 onwards which benefitted farmers of whole country.
Increased MSP has benefited farmers 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 last five years including current year are given below.
Procurement & MSP value of MSP Crops
All MSP Crops 2020-21 2021-22 2022-23 2023-24 2024-25*
Total
Procurement 1,368 1,083 1,118 1,089 1,175
(In LMT)
Total MSP Value
2.91 2.25 2.47 2.63 3.33
(In lakh Crore)
*As on 30.06.2025
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.
(d): National Institution for Transforming India (NITI) Aayog (erstwhile Planning
Commission) has conducted a study entitled “Efficacy of minimum support prices on
farmers”, 2016. The study covered 14 States, 36 Districts, 72 Blocks, 144 Villages and 1440
Households. The study is based on both the primary and secondary data. The study has
found among other things 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.
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