Farmers Rejoice As Govt Raises Minimum Support Price For Crops

NEW DELHI: A month ahead of last year’s schedule, the Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Shri Narendra Modi has approved the increase in the Minimum Support Prices (MSPs) for all mandated Rabi crops for marketing season 2021-22. This increase in MSP is in line with the recommendations of the Swaminathan Commission.

The government said that the hike is proof that procurement at MSP and the APMC Mandis will continue to function, however, the farmer will be free to sell his produce outside these systems anywhere throughout the country to get remunerative prices.

The hike came after assurances by the Prime Minister Narendra Modi and his ministers that the MSP will not be scrapped. PM Modi called the hike “another historic decision”.

The highest increase in MSP has been announced for lentil (Rs. 300 per quintal) followed by gram and rapeseed and mustard (Rs. 225 per quintal each) and safflower (Rs. 112 per quintal). For barley and wheat, an increase of Rs. 75 per quintal and Rs 50 per quintal respectively has been announced. The differential remuneration is aimed at encouraging crop diversification.

The MSP hike announced today covered wheat, the key crop in Punjab and Haryana, where the farmers’ protest has been loudest. The MSP of wheat has been increased by ₹ 50 a quintal and will be ₹ 1975 per quintal this season. The other big crop in the area, mustard, will now fetch ₹ 4,650 a quintal — a jump of ₹ 225 a quintal.

The Food Corporation of India (FCI) and other state agencies will continue to purchase farm produce at MSP as before. Hon’ble Prime Minister has always given assurance that procurement at MSP will continue, and the mandi system will also continue.

The announcement of the MSP before the start of the Rabi season will help the farmers in deciding on their crop structure. The MSP for pulses (lentil) and oilseeds has been increased to boost production of these crops so that import of these items can be reduced.

During 2009-2014, 1.52 LMT pulses was procured by the government. During 2014-2019, 76.85 LMT pulses have been procured which is an increase of 4962 per cent. The payment made at MSP rates in the last 6 years is Rs. 7 lakh crore which is double that made by the previous government.

MSP rates fixed in line with Swaminathan Commission recommendation:

The Committee headed by Dr M.S. Swaminathan had recommended that MSP should be at least 50% more than the average production cost. The present Government under Prime Minister Narendra Modi accepted the recommendations of the Swaminathan Commission.

The increase in MSP for Rabi Crops for marketing season 2021-22 is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the All-India weighted average Cost of Production as announced in Union Budget 2018-19.

The expected returns to farmers over their cost of production are estimated to be highest in case of Wheat (106%) followed by rapeseed & mustard (93%), gram and lentil (78%).

For barley, return to farmers over their cost of production is estimated at 65% and for safflower, it is 50%. Presently MSP is fixed for 22 agricultural crops.

Support is in the form of MSP as well as procurement. In the case of cereals, Food Corporation of India (FCI) and other designated State Agencies would continue to provide price support to the farmers. Government has set up a buffer stock of pulses and domestic procurement of pulses is also being done under the Price Stabilization Fund (PSF).

The Umbrella Scheme “Pradhan Mantri Annadata Aay SanraksHan Abhiyan” (PM-AASHA), comprising Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS), and pilot Scheme of Private Procurement and Stockist Scheme (PPSS) will aid in the procurement of pulses and oilseeds.

Minimum Support Prices for all Rabi crops for marketing season 2021-22

Crops	MSP for RMS 2020-21 (Rs/quintal)	MSP for RMS 2021-22 (Rs/quintal)	Cost* of production 2021-22 (Rs/quintal)	Increase in MSP (Rs/quintal)	Return over cost (in per cent)
Wheat	1925	1975	960	50	106
Barley	1525	1600	971	75	65
Gram	4875	5100	2866	225	78
Lentil (Masur)	4800	5100	2864	300	78
Rapeseed & Mustard	4425	4650	2415	225	93
Safflower	5215	5327	3551	112	50

Annual Increase in MSP since last six years (In Rs. per quintal)

Commodity	2013-14	2014-15	2015-16	2016-17	2017-18	2018-19	2019-20	2020-21
Wheat	1400	1450	1525	1625	1735	1840	1925	1975
Barley	1100	1150	1225	1325	1410	1440	1525	1600
Gram	3100	3175	3500	4000	4400	4620	4875	5100
Lentil (Masur)	2950	3075	3400	3950	4250	4475	4800	5100
Rapeseed & Mustard	3050	3100	3350	3700	4000	4200	4425	4650
Safflower	3000	3050	3300	3700	4100	4945	5215	5327

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