Government of India Affirms Commitment to Minimum Support Price (MSP) Policy, Procures Record Amount of Foodgrains

New Delhi:  In a recent update, the Government of India has reaffirmed its dedication to the Minimum Support Price (MSP) policy, ensuring fair remuneration for farmers. The MSP for 22 mandated agricultural crops is determined based on recommendations from the Commission for Agricultural Costs & Prices (CACP), input from State Governments, and relevant Central Ministries/Departments.

The Union Budget for 2018-19 introduced a predetermined principle to maintain MSP at levels one and a half times the cost of production. Since the agricultural year 2018-19, MSPs for all mandated crops, including kharif, rabi, and other commercial crops, have been increased with a minimum return of 50 percent over the all-India weighted average cost of production.

To implement the MSP Policy effectively, the government supports the prices of paddy and wheat through the Food Corporation of India (FCI) and State Agencies. Under this policy, food grains meeting government specifications are purchased at MSP by state agencies and FCI for the Central Pool.

In addition to paddy and wheat, oilseeds, pulses, and copra of Fair Average Quality (FAQ) are procured from registered farmers under the Price Support Scheme. This falls under the Umbrella Scheme of PM-AASHA, with guidelines ensuring procurement at MSP when market prices fall below the specified rate. Cotton and Jute are also procured at MSP through the Cotton Corporation of India (CCI) and Jute Corporation of India (JCI), respectively.

The government’s overarching objective is to guarantee remunerative prices for farmers by procuring their produce at MSP. However, farmers maintain the flexibility to sell their crops to government procurement agencies at MSP or in the open market, choosing the option that is most advantageous to them.

According to data provided by the Union Minister of Agriculture and Farmers’ Welfare, Shri Arjun Munda, the procurement of foodgrains has witnessed a substantial increase from 761.40 lakh metric tonnes in 2014-15 to 1062.69 lakh metric tonnes in 2022-23. This surge has benefitted more than 1.6 crore farmers. Correspondingly, the expenditure incurred on procurement of foodgrains (at MSP values) has risen from 1.06 lakh crores to 2.28 lakh crores during the same period, reflecting the government’s continued commitment to supporting farmers and ensuring food security.