Government fixes Minimum Support Prices (MSPs) of 22 mandated agricultural crops and Fair & Remunerative Price (FRP) for Sugarcane on the basis of recommendations of Commission for Agricultural Costs & Prices (CACP), after considering the views of State Governments and Central Ministries/Departments concerned and other relevant factors. In addition, MSP for Toria and De-Husked coconut is also fixed on the basis of MSPs of Rapeseed/Mustard and Copra respectively. The Union Budget for 2018-19 had announced the pre-determined principle to keep MSPs at levels of one and half times the cost of production for all mandated crops. Accordingly, Government has increased MSPs for all mandated agricultural crops for the season 2018-19. Details of cost, MSP and percent return over cost for the year 2017-18 & 2018-19 is at Annexure I. 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.

Government is committed to farmers welfare and towards this objective it has changed its strategy from being production centric to an income centric one. The above MSP policy is another progressive step forward in a series of reforms that the Government has been rolling out for the last 4 years, committed as it is to doubling farmers’ income by 2022 and improving the welfare substantively.

 Region specific parameters are kept in view by the CACP while recommending MSP for agricultural crops.  Since the cost of production varies in different States on account of differences in levels of irrigation, resource endowment, farm mechanization, land holding size etc., CACP uses all-India weighted average cost of production while making its recommendations and recommends uniform MSP which is applicable to all states. Details of State-wise cost of production for the year 2018-19 is given at Annexure II. As per the existing arrangements, procurement is made of the crops for which MSPs are announced through Central and State agencies. In so far as cereals/nutri cereals are concerned, they are procured through FCI and decentralized procurement system mainly for distribution under the public distribution system (PDS), for welfare schemes and buffer stocking for food security. Government implements Price Support Scheme (PSS) for   procurement of  oilseeds,    pulses  and    cotton    through     Central  Nodal Agencies  at  MSP  declared   by   the    Government.     A n ew c Umbrella   Scheme ‘Pradhan Mantri Annadata Aay

SanraksHan Abhiyan’ (PM-AASHA) has been announced by the government. The scheme consists of three sub-schemes i.e. Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and Private Procurement & Stockist Scheme (PPSS) on a pilot basis.

The payments to the farmers are made through Real Time Gross settlement (RTGS)/ National Electronic Fund Transfer (NEFT) and account payee cheque by the procuring agencies. However, if producer/farmers gets better price in comparison to MSP, they are free to sell their produce in open market.

Annexure I

Annexure referred to in reply to part (a) to (c) of Lok Sabha Unstarred Question No.14 due for reply on 11.12.2018.

Cost*, Minimum Support Price (MSP) & percent return over cost               

 (Rs/Qtl)

* Includes all paid out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc, miscellaneous expenses and imputed value of family labour.

# Fair and Remunerative Price (FRP)

Annexure-II

This information was given by  Minister of State for Ministry of Agriculture & Farmers Welfare Shri Gajendra Singh Shekhawat. 

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APS/RCS