Centre increases Minimum Support Price of all Rabi crops

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The Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister 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.

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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 highest increase in MSP has been announced for lentil (Rs. 300 per quintal) followed by the 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.

Making a statement to this effect in Lok Sabha today, the Union Minister Narendra Singh Tomar said that the announcement is a befitting reply to those criticising the government and making false propaganda about the new Agricultural Amendment Bill.

Following is the list of items and the price increased:

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

CropsMSP 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)
Wheat1925197596050106
Barley152516009717565
Gram48755100286622578
Lentil (Masur)48005100286430078
Rapeseed &Mustard44254650241522593
Safflower52155327355111250

The increase in MSP for Rabi Crops for marketing season 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%.

The Union Minister further said that 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).

  • Kisan Rail has been started.

The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Ordinance, 2020 and The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Ordinance, 2020 have been promulgated so as to provide alternative channels for farmers to sell their produce outside traditional APMC mandi system and to encourage private participation in agribusiness. The Essential Commodities (Amendment) Ordinance, 2020 has been promulgated to build efficient agri-food supply chains and attract more private sector investment in value-addition, scientific storage, warehousing and marketing infrastructure.

Under the Scheme for Agriculture Infrastructure Fund, Rs 1 Lakh Crore will be provided by the banks and financial institutions as loans with interest subvention of 3% per annum and credit guarantee coverage under CGTMSE (Credit Guarantee Fund Trust for Micro and Small Enterprises) for loans up to Rs. 2 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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