Govt hikes MSP for grains, pulses and oilseeds; steps up procurement

21 Sep 2020


A day after passing the farm bills that would enable farmers to realise better prices for their produce outside the State Agricultural Produce Marketing Committees (APMCs), the Narendra Modi government today announced an increase in Minimum Support Prices (MSPs) under the government procurement programme. 

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi on Monday approved the increase in the MSPs for all mandated Rabi crops for marketing season 2021-22. This increase in MSP is in line with the recommendations of Swaminathan Commission.
Also, in view of nutritional requirements and changing dietary pattern and to achieve self-sufficiency in pulses and oilseeds production, the government has fixed relatively higher MSP for these crops.
The government also decided to increase the number of procurement centres so as to reach the benefits of higher prices to more farmers across the country.
Procurement centres for wheat and pulses and oilseeds have already been increased by 1.5 times and 3 times, respectively, during Covid pandemic.
The highest increase in MSP is for lentil (Rs300 per quintal) followed by gram and rapeseed and mustard (Rs225 per quintal each) and safflower (Rs112 per quintal). For barley and wheat, an increase of Rs75 per quintal and Rs50 per quintal respectively has been announced. The differential remuneration is aimed at encouraging crop diversification.
An official release said the increase in MSP for Rabi crops for marketing season 2021-22 is in line with the principle of fixing 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 per cent) followed by rapeseed and mustard (93 per cent), gram and lentil (78 per cent). For barley, return to farmers over their cost of production is estimated at 65 per cent and for safflower, it is 50 per cent.
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 Price Stabilization Fund (PSF).
The Umbrella Scheme, `Pradhan Mantri AnnadataAaySanraksHan 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 procurement of pulses and oilseeds.
Despite Covid-19 pandemic and consequent nationwide lockdown, state procurement has set an all-time record for wheat at about 39 million tonnes for RMS 2020-21. Around 4.3 million farmers benefitted under procurement operations period which is 22 per cent higher than the RMS 2019-20. In 2019-20, an estimated 39 million tonnes of wheat has been procured, while in 2014-15, 28 million tonnes were procured. In 2019-20, 1.5 million tonnes of pulses is estimated to be procured, while in 2014-15, 3 lakh tonnes were procured. In 2019-20, an estimated 1.8 million tonnes of oilseeds was procured, while in 2014-15, 12,000  tonnes were procured.
In the current pandemic situation, all concerted efforts are being made by the government to alleviate the problems faced by the farmers. 
During pandemic 39 million tonnes of wheat has been procured at a cost of Rs75,000 crore, which is 15 per cent more than the last year’s procurement.
The launch of `PM Kissan Samman Nidhi Yojana’ has benefited around 100 million farmers. Total disbursed amount is around Rs93,000 crore.
Nearly 90 million farmers have received around Rs38,000 crore during Covid pandemic under PMKISAN.
About 12.5 million new Kisan credit cards (KCCs) have been issued in the last 6 months.
Summer Season sowing has shot up to 5.7 million hectares, which is 1.6 million hectare more than the last year. Kharif sowing is also 5 per cent higher than that of last year.
The number of E-NAM markets has increased from 585 to 1,000 during Covid pandemic. Last year, e-platform witnessed trade of Rs35,000 crore.
Rs6,850 crore will be spent for creation of 10,000 FPOs over the period of five years.
In the last 4 years under Fasal Bima Yojana, farmers received a claim of Rs77,000 crore against paid premium of Rs17,500 crore.
Under the Agriculture Infrastructure Fund scheme, Rs1,00,000 crore will be provided by banks and financial institutions as loans with interest subvention of 3 per cent per annum and credit guarantee coverage under CGTMSE Credit Guarantee Fund Trust for Micro and Small Enterprises (GGTMSE)) for loans up to Rs2 crore. The scheme will support farmers, PACS, FPOs, agri-entrepreneurs, etc in building community farming assets and post-harvest agriculture infrastructure.

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