Minimum Support Prices (MSP)

Subject: Economy

Context:

The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister has approved the increase in the Minimum Support Prices (MSPs) for all mandated Kharif crops for marketing season 2020-21.

Concept:

• Based on the recommendation of Commission for Agricultural Costs and Prices (CACP), the Cabinet has approved MSP of 14 kharif crops for 2020-21. Farmers would get 50-83 per cent higher return over the cost of production
• The Centre has increased the MSP of kharif crops for 2020-21 crop year in line with the principle of fixing MSPs at a level which is at 1.5 times the cost of production that was announced in Union Budget 2018-19.
• Concerted efforts were made over the last few years to realign the MSPs in favour of oilseeds, pulses and coarse cereals to encourage farmers shift to larger area under these crops and adopt best technologies and farm practices, to correct demand – supply imbalance.
• The added focus on nutri-rich nutri-cereals is to incentivize its production in the areas where rice-wheat cannot be grown without long term adverse implications for groundwater table.
• Crops covered under MSP: Paddy, Jowar, Bajra, Ragi, Maize, Tur, Moong, Urad, groundnut, sunflower seed, soyabean, nigerseed, Cotton and sesamum
• Besides, the Umbrella Scheme “Pradhan MantriAnnadataAaySanraksHanAbhiyan” (PM-AASHA) announced by the government in 2018 will aid in providing remunerative return to farmers for their produce.
• The Umbrella Scheme consists of three sub-schemes i.e.
• Price Support Scheme (PSS)
• Price Deficiency Payment Scheme (PDPS)
• Private Procurement &Stockist Scheme (PPSS) on a pilot basis.