The farmers who were on protest since November 2020 have demanded a law on MSP. The Centre has agreed to set up a Committee to study the issue.
In a written reply in Rajya Sabha, minister of agriculture and farmers welfare Narendra Singh Tomar highlighted the changing MSP values since 2017.
As per the document, for majority of the crops the MSP rate has been hiked by about 2-5 per cent annually in the past couple of years.
A quintal of paddy used to cost Rs 1,550 in 2017-18. Over the years, the MSP rate on this crop has jumped to Rs 1,940 in 2021-22.
However, MSP on Ragi, Nigerseed, Jowar and Bajra witnessed the highest jump at 77 per cent, 71 per cent, 61 per cent and 57 per cent respectively.
For wheat, the rate soared from Rs 1,735 per quintal in 2017-18 to Rs 2,015 per quintal in 2021-22.
What is MSP
MSP is the basic price or the rate at which the Centre procures foodgrains from the farmers.
Under this system, the government fixes a rate for 22 agricultural crops and fair and remunerative price (FRP) for sugarcane.
It helps protect farmers against any sudden fall in price of farm produce.
In other words, it is an intervention by the government to insure agricultural produce against any unexpected fall in prices.
Initially, it was declared mainly for wheat and paddy but later extended to other crops as well. However, bulk of Centre’s procurement has remained limited to wheat and paddy only.
How is MSP rate decided
The government of India declares MSP every year for 22 commodities like cereal, pulses, oil seeds and commercial crops at the beginning of sowing season.
This is based on the recommendations of the Commission for Agricultural Costs and Prices (CACP) and is finalised after considering views of the concerned state governments and central ministries.
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