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Government declares Minimum Support Prices (MSP) for Rabi Crops for marketing season 2021-22

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21 September 2020, New Delhi: The Minimum Support Prices (MSPs) for all mandated Rabi crops for marketing season 2021-22 has been approved by the Cabinet Committee on Economic Affairs (CCEA).

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This increase in MSP is in line with the recommendations of Swaminathan Commission. Announcing this in the Lok Sabha today, Union Minister of Agriculture & Farmers Welfare Mr. Narendra Singh Tomar said this is a very important day for farmers.

The highest increase in MSP has been announced for lentil (Rs. 300 per quintal) followed by gram and rapeseed & 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. 

Mr. Narendra Singh Tomar said that the Food Corporation of India (FCI) and other State agencies will continue to purchase farm produce at MSP as before. Hon’ble Prime Minister has always given assurance that procurement at MSP will continue, and the mandi system will also continue.

The Union Agriculture Minister said that the announcement of the MSP before the start of the Rabi season will help the farmers in deciding on their crop structure. The MSP for pulses (lentil) and oilseeds has been increased to boost production of these crops so that import of these items can be reduced.

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Mr. Tomar said that during 2009-2014, 1.52 LMT pulses was procured by the government. During 2014-2019, 76.85 LMT pulses have been procured which is an increase of 4962 per cent. The payment made at MSP rates in the last 6 years is Rs. 7 lakh crore which is double that made by the previous government.

He said that as assured by the Hon’ble PM and by the Government of India, new MSP rates have been announced today. This is proof that procurement at MSP and the APMC mandis will continue to function, however, the farmer will be free to sell his produce outside these systems anywhere throughout the country to get remunerative prices.

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)
Lentil (Masur)48005100286430078
Rapeseed &Mustard44254650241522593
Minimum Support Prices for all Rabi crops for marketing season 2021-22

*Includes all paid out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc, miscellaneous expenses and imputed value of family labour.

Lentil (Masur)29503075340039504250447548005100
Rapeseed & Mustard30503100335037004000420044254650
 Annual Increase in MSP since last six years (In Rs. per quintal)
MSP rates fixed in line with Swaminathan Commission recommendation

The Committee headed by Dr M.S. Swaminathan had recommended that MSP should be at least 50% more that the average production cost.  The present Government under Prime Minister Shri Narendra Modi accepted the recommendations of the Swaminathan Commission. The increase in MSP for Rabi Crops for marketing season 2021-22 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.

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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%. Presently MSP is fixed for 22 agricultural crops.

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 Price Stabilization Fund (PSF).

The Umbrella Scheme “Pradhan Mantri Annadata Aay SanraksHan Abhiyan” (PM-AASHA), comprising Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS), and pilot Scheme of Private Procurement and Stockist Scheme (PPSS) will aid in procurement of pulses and oilseeds.

Photo credit: kinshuksunil on / CC BY-SA

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