MSP for Rabi Crops

On 23rd October 2019, Government of India (GoI) approved to increase the Minimum Support Price (MSPs) for Rabi crops for the year 2019-20 and crops shipped for the 2020-21 Rabi Marketing Season (RMS). The raise for the MSPs were analysed and implemented by the Cabinet Committee on Economic Affairs (CCEA).

Objectives

To increase the MSP of Rabi crops for and during the Rabi Marketing Season
To increase the production of Rabi crops for the next season
To provide support for doubling the average cost production
To help increase the margin profit for the wheat farmers
Help reduce liability and loans availed from banks

Minimum Support Price (MSPs)

Minimum Support Price was initiated by the GoI to protect the agricultural producers during the decline of crop value. The MSPs are fixed prices that are announced by the government at the beginning of the sowing season. The MSPs will be provided through schemes for a long time investment and guarantee. The MSPs for crops are determined by:

The cost involved for production
Changes occurred in input prices
Changes in market prices
Increased demand and supply of crops
Increased requirement in the cost of living

Crops Covered for MSPs

S. No.	Crops	Types
1	Cereals	Paddy Wheat Barley Jowar Bajra Maize and Ragi
2	Pulses	Gram Arhar or Tur Moong Urad Lentil
3	Oilseeds	Groundnut Rapeseed or mustard Toria Soybean Sunflower Seed Sesamum Safflower Seed Nigerseed
4	Raw Cotton
5	Raw Jute
6	Copra
7	De-husked coconut
8	Sugarcane
9	Virginia flu cured (VFC) tobacco

Benefits of increase in MSP

Increases MSPs for RMS for the year 2020-21
Meets the average cost of production at least 1.5 times
The wheat farmers are secured with 50 per cent of the margin profit
Doubles the farmers' income and increases the welfare of the family
Increases the production for small and medium-scale farmers
The losses shall be covered by the Indian Government as per the guidelines

Support from State Governments

State Agencies and Food Corporation of India (FCI) shall provide financial support for farmers for cereals.
For grains, the State Government shall seek prior approval from NFSA for distribution of price support and subsidy
The NAFED, SFAC and other central agencies shall provide support for pulses and oilseeds

Support from Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA)

To streamline and regularise the remunerative prices for the farmers, GoI introduced PM-AASHA scheme. Any remunerative support for the farmers shall be provided through the following umbrella schemes:

Price Support Scheme (PSS)
Price Deficiency Payment Scheme (PDPS) and
Private Procurement and Stockist Scheme (PPSS)

This scheme shall provide support for paddy, wheat and cash crops.

Minimum Support Prices (MSPs) for Rabi Marketing Season 2020-21

S. No	Crops	Cost of RMS (2020-21)	MSP for RMS (2019-20)	MSP for RMS (2020-21)	Increased MSP	Percentage of return over cost
1	Wheat	923	1840	1925	85	109
2	Barley	919	1440	1525	85	66
3	Gram	2801	4620	4875	255	74
4	Lentil	2727	4478	4800	325	76
5	Rapeseed and mustard	2323	4200	4425	225	90
6	Safflower	3470	4945	5215	270	50

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