Question

Cabinet committee on economic affairs declared msp for

Answer 1

The Cabinet Committee on Economic Affairs, chaired by the Prime Minister Shri Narendra Modi, has given its approval for the increase in the Minimum Support Prices (MSPs) for all Kharif Crops of 2016-17 Season. Further, to incentivise cultivation of pulses and oilseeds , in the country Government has announced a bonus on these crops, payable over and above the approved MSP.

The decision to increase MSPs is based on the recommendations of Commission for Agricultural Costs and Prices (CACP) which takes into account the cost of production, overall demand-supply, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect of the Price Policy on the rest of economy, besides ensuring rational utilization of production resources like land and water, while recommending MSPs.

The CACP being the expert body, its recommendations are generally accepted as such.  However, to incentivise cultivation of pulses and oilseeds, the Cabinet has decided to give a bonus, over and above the recommendations of the CACP, of Rs.425/- per quintal for kharif pulses, namely Arhar (Tur), Urad and Moong, a bonus of Rs 200/- per quintal for Sesamum and a bonus of Rs 100/- per quintal for other kharif oilseeds namely, Groundnut-in-shell, Sunflowerseed, Soyabean, and Nigerseed. There is an increasing gap between the demand and domestic supply of pulses and oilseeds and reliance on import is increasing. Government has, therefore, announced this bonus on pulses and oilseeds to give a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops. The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.