(a) the formula adopted for determining the Minimum Support Price (MSP) along with MSP of different crops, crop-wise;
(b) whether the latest MSP for crops matches with the price formula of C2 plus 50 per cent as recommended by the Swaminathan Commission on Farmers and if so, the details thereof and if not, the reasons therefor; and
(c) the measures taken by the Government over the last four years in ensuring MSP equal to C2 plus 50 percent?
MINISTER OF STATE IN THE MINISTRY OF AGRICULTURE AND FARMERS WELFARE
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(a): Government fixes minimum support prices (MSPs) of 22 mandated agricultural crops (14 kharif crops, 6 rabi crops and 2 other commercial crops) and fair & remunerative price (FRP) for sugarcane on the basis of recommendations of the Commission for Agricultural Costs & Prices (CACP). In addition, MSP for toria and de-husked coconut is also fixed on the basis of MSPs of rapeseed/mustard and Copra respectively. While recommending MSPs, the CACP considers important factors like cost of production, overall demand-supply conditions, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect on the rest of the economy, besides ensuring rational utilization of productive resources like land and water. From 2018-19, the Government has ensured that the MSPs are fixed at least at a level of 150% of the cost of production. Details of cost, MSP and percent return over cost for the years 2017-18 and 2018-19 is at Annexure.
(b): The National Commission on Farmers (NCF) headed by Dr. M. S. Swaminathan has recommended that the MSP should be at least 50 percent more than the weighted average cost of production. However, when the National Policy for Farmers, 2007 was finalized, this recommendation of providing 50 per cent returns over cost of production was not included. Dr. M. S. Swaminathan in his Report on NCF had discussed different dimensions of fixing MSPs, but while finalizing National Policy on Farmers, the then Government had accepted the current established methods.
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CACP considers A2+FL and C2 costs while recommending MSPs. CACP reckons only A2+FL cost for return. C2 costs are used by CACP primarily as benchmark reference costs (opportunity costs) to see if the MSPs recommended by them at least cover these costs in some of the major producing States.
(c): Government generally increases the MSPs of all notified crops which provide adequate return over cost of production. Government has increased MSPs substantially for all mandated crops for the season 2018-19. This decision of the Government was a historic one as it fulfills the commitment to the farmers to provide 50 per cent return over cost of production for the first time for all mandated crops.
Government has taken several initiatives to raise the yield levels, reduce the cost of production and thereby provide better returns to farmers which include Soil Health Card, Pradhan Mantri Krishi Sinchai Yojana (PMKSY), neem-coated urea (NCU), bio pesticides for promoting integrated pest management, production and supply of quality seeds, promoting water saving devices like sprinkler sets, drip irrigation systems etc.