Minimum Support Prices (MSPs) For All Crops

Key Highlights:

• Government fixes Minimum Support Prices (MSPs) for 22 mandated agricultural crops based on recommendations from the Commission for Agricultural Costs & Prices (CACP).
• Since 2018-19, MSPs are set at least 1.5 times the all-India weighted average cost of production.
• Procurement of pulses, oilseeds, and copra is done under the Price Support Scheme (PSS), a component of Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA).
• New components under the Market Intervention Scheme (MIS) from 2024-25 include Price Differential Payment (PDP) and reimbursement for storage/transport of TOP crops (Tomato, Onion, Potato).
• Total procurement of MSP crops increased from 6,987 Lakh Metric Tonne (LMT) during 2004-14 to 12,819 LMT during 2014-26.
• The MSP amount paid to farmers rose from Rs. 7.41 Lakh Crore (2004-14) to Rs. 27.80 Lakh Crore (2014-26).

Detailed Insights:

• Food Corporation of India (FCI) and designated State Agencies procure cereals and coarse cereals to provide price support.
• National Agricultural Cooperative Marketing Federation of India Ltd (NAFED) and National Co-operative Consumers' Federation of India Ltd. (NCCF) are central nodal agencies for PM-AASHA.
• Cotton Corporation of India (CCI) and Jute Corporation of India (JCI) procure cotton and jute at MSP, respectively.
• Procurement processes have been enhanced with direct bank payments to farmers and linkage of Aadhaar and land records.
• The Mission for Aatmanirbharta in Pulses aims for self-sufficiency by 2030-31, encouraging domestic production.
• MIS protects growers of perishable commodities from distress sales when market prices fall below economic levels during bumper crops.
• The PDP component under MIS allows direct payment of the price difference between the Market Intervention Price and the selling price to farmers.
• Reimbursement for storage and transportation costs of TOP crops aims to facilitate their movement from producing to consuming states.
• Government implements various policies and reforms to increase agricultural productivity, reduce cultivation costs, and ensure remunerative returns.

Key Concepts Involved:

• Minimum Support Price (MSP): A guaranteed price set by the government for agricultural produce to protect farmers against sharp falls in price.
• Commission for Agricultural Costs & Prices (CACP): An advisory body that recommends MSPs to the government for various crops.
• Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA): An umbrella scheme comprising Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS), and Private Procurement & Stockist Scheme (PPSS) to ensure remunerative prices to farmers.
• Market Intervention Scheme (MIS): A scheme for procurement of perishable agricultural and horticultural commodities not covered under PSS, to protect farmers from distress sales.