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HomePosts Tagged "Minimum Support Prices (MSP)"
AgroPolicy, Foodgrains, India, Oilseeds, Pulses

The highest absolute increase in MSP over the previous year has been recommended for oilseeds and pulses viz. nigerseed (Rs 983/- per quintal).

The Union Cabinet chaired by Prime Minister Narendra Modi approved the increase in the Minimum Support Prices (MSP) for all mandated Kharif Crops for Marketing Season 2024-25. Government has increased the MSP of Kharif Crops for Marketing Season 2024-25, to ensure remunerative prices to the growers for their produce. The highest absolute increase in MSP over the previous year has been recommended for oilseeds and pulses viz. nigerseed (Rs.983/- per quintal) followed by sesamum (Rs.632/- per quintal) and tur/arhar (Rs.550/- per quintal).

The increase in MSP for Kharif Crops for Marketing Season 2024-25 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the All-India weighted average cost of production, The expected margin to farmers over their cost of production are estimated to be highest in case of bajra (77 per cent) followed by tur (59 per cent), maize (54 per cent) and urad (52 per cent). For rest of the crops, margin to farmers over their cost of production is estimated to be at 50 per cent.

In the recent years, Government has been promoting the cultivation of crops, other than cereals such as pulses and oilseeds, and Nutri-cereals/ Shree Anna, by offering a higher MSP for these crops.

During the period 2003-04 to 2013-14 for 14 crops covered under Kharif Marketing Season, the minimum absolute increase in MSP was Rs.745/- per quintal for Bajra and maximum absolute increase was Rs.3,130/- per quintal for Moong while during the period 2013-14 to 2023-24, the minimum absolute increase in MSP was Rs.780/- per quintal for Maize and maximum absolute increase was Rs.4,234/- per quintal for Nigerseed. Details are at Annexure-I.

During the period 2004-05 to 2013-14, the procurement of 14 crops covered under Kharif Marketing Season was 4,675.98 Lakhs Metric Ton (LMT) while during the period 2014-15 to 2023-24, procurement of these crops was 7,108.65 LMT. The year-wise details are at Annexure-II.

As per the 3rd Advance Estimates of production for 2023-24, total foodgrain production in the country is estimated at 3288.6 Lakhs Metric Ton (LMT), and oilseeds production is touching 395.9 LMT. During 2023-24, kharif production of rice, pulses, oilseeds and nutri-cereals/Shree Anna and cotton is estimated to be 1143.7 LMT, 68.6 LMT, 241.2 LMT, 130.3 LMT and 325.2 Lakh bales, respectively.

The highest absolute increase in MSP over

AgroPolicy, India

The MSP for 2024 season is an increase of Rs 300 per quintal for milling copra and Rs.250/- per quintal for ball copra over the previous season.

The Cabinet Committee on Economic Affairs chaired by the Prime Minister Narendra Modi, has given its approval for the Minimum Support Prices (MSPs) for copra for 2024 season. In order to provide remunerative prices to the cultivators, government had announced in the Union Budget of 2018-19, that MSPs of all the mandated crops will be fixed at a level of at least 1.5 times of all India weighted cost of production. The MSP for Fair Average Quality of milling copra has been fixed at Rs.11,160/- per quintal and for ball copra at Rs 12,000/- per quintal for 2024 season. This will ensure a margin of 51.84 percent for milling copra and 63.26 percent for ball copra, which are well beyond 1.5 times all India weighted average cost of production.  Milling copra is used to extract oil, while ball/edible copra is consumed as a dry fruit and used for religious purposes.  Kerala and Tamil Nadu are major producers of million copra, whereas ball copra is produced predominantly in Karnataka.

The MSP for 2024 season is an increase of Rs.300/- per quintal for milling copra and Rs.250/- per quintal for ball copra over the previous season. In the last 10 years, the Government has increased MSP for milling copra and ball copra from Rs.5,250 per quintal and Rs 5,500 per quintal in 2014-15 to Rs.11,160 per quintal and Rs.12,000 per quintal in 2024-25, registering a growth of 113 percent and 118 percent, respectively.

A higher MSP will not only ensure better remunerative returns to the coconut growers but also incentivize farmers to expand copra production to meet the growing demand for coconut products both domestically and internationally.

In the current season 2023, the Government has procured a record amount of more than 1.33 lakh metric tonnes of copra, at the cost of Rs.1,493 crores, benefiting around 90,000 farmers.  The procurement in the current season 2023 indicates a rise of 227 percent over the previous season (2022).

National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and National Cooperative Consumers’ Federation (NCCF) will continue to act as Central Nodal Agencies (CNAs) for procurement of copra and de-husked coconut under Price Support Scheme (PSS).

The MSP for 2024 season is an

AgroPolicy, Agrotech, Finance, Foodgrains, India, Industry Reports / Analysis

The report also mentioned that MSP might be converted to floor price of auction on e-NAM to benefit farmers.  

State Bank of India’s Economic Research Department has published a report on recent increase in MSP (Minimum Support Price) for Kharif crops for marketing season 2023-24 by central government. The report has been authored by Dr Soumya Kanti Ghosh, Group Chief Economic Adviser, State Bank of India. 

Highlights from the report:

The Union Cabinet has approved increased MSP for Kharif crops for marketing season 2023-24. The increase in MSP is in the range of 5-11 per cent. Interestingly, this increase is unlikely to be inflationary as any impact on inflation is directly proportional to procurement. While procurement of cereals is primarily in the realm of wheat and rice, the procurement of pulses by NAFED is not much.      

 Separately, in a welcome move that is unnoticed is that latest average modal prices in e-NAM mandis are higher than the MSP for some of the crops. MSP should be converted to Floor Price of Auction on e-NAM so that growers of crops like maize, ragi, moong are also benefitted. The e-NAM is not a parallel marketing structure but rather a device to create a national network of physical mandis which can be accessed online. Currently 1.76 crore farmers are part of e-NAM in 1361 mandis.                

The role of MSPs in influencing the inflation trajectory in India has been an issue of intense academic and public policy debate. While empirical findings are mixed, the actual impact of the MSP hike would depend on the procurement strategy of the Government as well as the ruling market prices of various crops vis-à-vis the revised MSPs. In our case, we believe the impact will be negligible depending on the prices prevailing in e-NAM markets and also the procurement.  

We recommend that MSP should be converted to Floor Price of Auction on e-NAM so that growers of crops like maize, ragi, moong are also benefitted. 

The report also mentioned that MSP might

AgroPolicy, Foodgrains, India, Oilseeds, Pulses

The absolute highest increase in MSP has been approved for lentil (Masur) at Rs 500 per quintal followed by rapeseed and mustard at Rs 400 per quintal.

The Cabinet Committee on Economic Affairs chaired by Narendra Modi, Prime Minister has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2023-24.

Government has increased the MSP of Rabi Crops for Marketing Season 2023-24, to ensure remunerative prices to the growers for their produce.  The absolute highest increase in MSP has been approved for lentil (Masur) at Rs 500 per quintal followed by rapeseed and mustard at Rs.400 per quintal.  For safflower, an increase of Rs.209 per quintal has been approved.  For wheat, gram and barley an increase of Rs110 per quintal, Rs 100 per quintal respectively has been approved.

The increase in MSP for Rabi Crops for Marketing Season 2023-24 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at lease 1.5 times of the All-India weighted average Cost of Production, aiming at reasonably fair remuneration for the farmers.  The maximum rate of return is 104 percent for rapeseed & mustard, followed by 100 percent for wheat, 85 per cent for lentil; 66 per cent for gram; 60 per cent for barley; and 50 per cent for safflower.

From the year 2014-15, there has been a renewed focus on increasing the production of oilseeds and pulses.  The efforts have yielded good results.  Oilseeds production has increased from 27.51 million tonnes in 2014-15 to 37.70 million tonnes in 2021-22 (4th advance estimates).  Pulses production has shown similar increasing trend.  The ‘Seed Mini kits programme’ is a major tool for introducing new varieties of seeds in the farmers’ fields and is instrumental for increasing the seed replacement rate.

The productivity of pulses and oilseeds have increased substantially since 2014-15.  In case of pulses productivity has been increased from 728 kg/ha (2014-15) to 892 kg/ha (4th Advance estimates, 2021-22) i.e., 22.53 per cent increase.  Similarly, in oilseed crops productivity has been increased from 1075 kg/ha (2014-15) to 1292 kg/ha (4th Advance estimates, 2021-22).

The absolute highest increase in MSP has