Executive Summary:
The Indian government addresses a query regarding strategies to ensure Minimum Support Prices (MSP) for all notified crops, especially those beyond paddy and wheat. The government uses the recommendations of the Commission for Agricultural Costs and Prices (CACP) to determine MSPs for 22 mandated crops. It also employs schemes like the Price Support Scheme (PSS) and Price Deficiency Payment Scheme (PDPS) under the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PMAASHA) to support farmers. A committee was formed on July 12, 2022, to enhance the effectiveness and transparency of MSPs.
Key Points / Main Content:
MSP Determination and Scope:
* MSPs are fixed for 22 mandated crops based on CACP recommendations, considering State Governments and Central Ministries/Departments' views.
* These crops include 14 Kharif crops, 6 Rabi crops, and 2 commercial crops.
* Since 2018-19, MSPs have been set at levels of one and a half times the cost of production.
Procurement Mechanisms:
* The Food Corporation of India (FCI) and State Agencies procure cereals and coarse cereals.
* Pulses, oilseeds, and copra procurement occurs under the Price Support Scheme (PSS) when market prices fall below MSP.
* The National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Co operative Consumers' Federation of India Ltd (NCCF) are the procurement agencies.
* The Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) procure cotton and jute, respectively.
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PMAASHA):
* PMAASHA includes the Price Support Scheme (PSS) and Price Deficiency Payment Scheme (PDPS).
* PSS implementation requires State/UT agreement to exempt Mandi tax and arrange necessary infrastructure.
* PSS procurement is initially sanctioned up to 25% of the State's production, with potential for additional procurement up to 25% of national production upon Committee of Secretaries (COS) approval.
* Procurement of Tur, Urad, and Masur under PSS is allowed up to 100% of state production for the procurement year 2024-25.
* PDPS involves direct payment of the price difference between MSP and selling price to registered farmers, limited to 15% of MSP value and 40% of production.
* States/UTs can choose between PSS or PDPS for specific oilseeds.
Market Intervention Scheme (MIS):
* The Market Intervention Scheme (MIS) supports perishable agricultural and horticultural commodities not covered under MSP.
* It aims to prevent distress sales during bumper crops.
Enhancing MSP Effectiveness:
* A committee formed on July 12, 2022, focuses on making MSPs more effective and transparent.
* The committee will give suggestions to give more autonomy to CACP and measures to make it more scientific.
* The committee also aims to strengthen the Agricultural Marketing System.
Impact Analysis:
Farmers:
* Impact: Benefit from MSPs for 22 crops, potentially receiving prices 50% above production costs, protection against distress sales, and income support through PSS and PDPS.
* Action Required: Register for PDPS to receive direct payments, and be aware of procurement processes and quality standards.
State Governments/Union Territories:
* Impact: Responsible for implementing PSS, exempting Mandi tax, arranging infrastructure, and can choose between PSS and PDPS.
* Action Required: Request PSS implementation, ensure infrastructure readiness, coordinate with central agencies, and decide between PSS and PDPS for oilseeds.
Procurement Agencies (FCI, NAFED, NCCF, CCI, JCI):
* Impact: Responsible for procuring crops at MSP, ensuring price support for farmers.
* Action Required: Efficiently procure crops, coordinate with State Governments/UTs, and manage storage and transportation.
Commission for Agricultural Costs and Prices (CACP):
* Impact: Plays a key role in the MSP determination process by providing recommendations.
* Action Required: Consider State Governments/Central Ministries/Departments' views when providing recommendations.
Central Government:
* Impact: Responsible for fixing MSPs, implementing schemes, and ensuring overall price support to farmers.
* Action Required: Monitor the implementation of schemes, address concerns about effectiveness, and explore alternative price support mechanisms.
Key Entities Referenced
Minimum Support Prices: A form of market intervention by the Government of India to insure agricultural producers against any sharp fall in farm prices.
Commission for Agricultural Costs and Prices: An advisory body that recommends minimum support prices for various crops to the Government of India.
Pradhan Mantri Annadata Aay Sanrakshan Abhiyan: An umbrella scheme by the Government of India to ensure fair prices to farmers for their produce.
Food Corporation of India: The agency responsible for the procurement and distribution of food grains in India.
National Agricultural Cooperative Marketing Federation of India Ltd: One of the central agencies for procurement of pulses, oilseeds and copra under the Price Support Scheme (PSS).
Price Support Scheme: A component of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PMAASHA) under which procurement of pulses, oilseeds, and copra is undertaken when market prices fall below MSP.
Price Deficiency Payment Scheme: A component of PMAASHA that involves direct payment of the price difference between MSP and the selling price to registered farmers.
Cotton Corporation of India: The agency responsible for procurement of cotton at MSP.
O.I.H.
GOVERNMENT OF INDIA
MINISTRY OF AGRICULTURE AND FARMERS WELFARE
DEPARTMENT OF AGRICULTURE AND FARMERS WELFARE
LOK SABHA
UNSTARRED QUESTION NO. 319
TO BE ANSWERED ON THE 22ND JULY, 2025
STRATEGY TO ENSURE MSP FOR CROPS OTHER THAN PADDY AND WHEAT
319. SMT. BHARTI PARDHI:
SHRI SHRIRANG APPA CHANDU BARNE:
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) the details of strategy of the Union Government to ensure that farmers get MSP for all
their notified crops, particularly for crops other than paddy and wheat;
(b) the details of steps taken to strengthen the procurement infrastructure in the States where
it is weak;
(c) the manner in which the Union Government is addressing concerns about the
effectiveness or in areas with limited market access; and
(d) whether there are any plans to explore alternative price support mechanisms or introduce
a legal guarantee for MSP to provide greater certainly to farmers and if so, the details
thereof?
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 मं(cid:287)ी (SHRI RAMNATH THAKUR)
(a) to (c): Government fixes Minimum Support Prices (MSPs) for 22 mandated
agricultural crops based on the recommendations of Commission for Agricultural Costs &
Prices (CACP), after considering the views of State Governments and Central
Ministries/Departments concerned. The 22 mandated crops include 14 Kharif crops viz.
paddy, jowar, bajra, maize, ragi, tur (arhar), moong, urad, groundnut, soyabean, sunflower,
sesamum, nigerseed, cotton and 6 Rabi crops viz. wheat, barley, gram, masur (lentil),
rapeseed & mustard, safflower and two commercial crops viz. jute and copra.
The Union Budget for 2018-19 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 minimumreturn of 50 percent over all India weighted average cost of production from year 2018-19
onwards.
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.
Under the integrated Scheme of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan
(PM-AASHA), Government is implementing Price Support Scheme (PSS) and Price
Deficiency Payment Scheme (PDPS).
Price Support Scheme (PSS) is implemented on the request of the State Govt./ UT
that agrees to exempt from levy of Mandi tax on the procurement of notified pulses, oilseeds
and copra and make arrangements like booking of CWC/SWC Godowns/scientific storage
facility, identification of procurement centers, arrangement of gunny bags, GPRS enabled
transportation facilities, weighing machines. Moisture/foreign matters/oil content testing
machines etc. in consultation with Central Nodal Agencies (CNAs) like National Agricultural
Cooperative Marketing Federation of India Ltd. (NAFED) and National Co- operative
Consumers' Federation of India Ltd. (NCCF)and State level agencies.
From the procurement year 2024-25, the sanction for the procurement of notified
Pulses, Oilseeds and Copra under PSS is given to the State/UT initially upto a maximum of
25% of the production of the State for that particular season. Subsequently, if the State/UT
achieves the overall procurement against sanctioned quantity and further intends to procure
more beyond the sanctioned quantity, the proposal for the procurement under the PSS is put
up for the consideration of the Committee of Secretaries (COS) restricted upto a maximum of
25% of the national production. However, in order to incentivize the farmers contributing in
enhancement of domestic production of pulses and to reduce the dependence on imports,
the Government has allowed the procurement of Tur, Urad and Masur under PSS equivalent
to 100% of the production of the State for the procurement year 2024-25.
Price Deficit Payment Scheme (PDPS) envisages the direct payment of the price
difference between the MSP and the selling / modal price in notified market upto 15% of MSP
value (including 2% administrative cost) by the Central Government to the pre- registered
farmers selling the oilseeds upto 40% of its production to the prescribed Fair Average Quality
(FAQ) in the notified market yard through a transparent auction process within the stipulated
period. However, the States/UTs have the option to implement either PSS or PDPS for the
particular oilseeds for the particular year/season. If any State is willing to cover quantities
beyond 40%, they can do so from it's resources.
For perishable agricultural and horticultural commodities including vegetables and
fruits which are not covered under the MSP, Government implements Market InterventionScheme (MIS) on the request of State/UT Government concerned. The objective of
intervention is to protect the growers of these commodities from making distress sale in the
event of a bumper crop during the peak arrival period when the prices tend to fall below
economic levels and cost of production.
(d): 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.
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