COST- REFLECTIVE MINIMUM SUPPORT PRICES (MSPS) FRAMEWORK

COST- REFLECTIVE MINIMUM SUPPORT PRICES (MSPS) FRAMEWORK

Every year, The Government fixes Minimum Support Prices (MSPs) for 22 mandated agricultural crops including 14 kharif crops for the country as a whole based on the recommendations of Commission for Agricultural Costs & Prices (CACP), after considering the views of State Governments and Central Ministries/Departments concerned. While recommending MSPs, CACP considers important factors like cost of production, overall demand-supply conditions, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect on the rest of the economy, besides ensuring rational utilization of land, water and other production resources.

The Union Budget for 2018-19 had announced the pre-determined principle to keep MSPs at levels of at least one and half times of the cost of production. Accordingly, the Government had increased MSPs for all mandated Kharif, Rabi and other Commercial crops with a minimum return of 50 percent over all India weighted average cost of production from year 2018-19 onwards.

This information was given by Minister of State for Agriculture and Farmers Welfare,Shri Ramnath Thakur in a written reply in Lok Sabha today.