July 14, 2024


The business lovers

How many agricultural households are aware of MSP?

Even as farmers agitating against farm laws have been demanding guaranteed Minimum Support Price (MSP), the majority of agricultural households in India are not even aware of the MSP concept, and the percentage of output sold by households under the MSP range between 0 to 24.7 per cent (except sugarcane). Paddy and wheat growing households dominate the charts of MSP awareness and output sold under the MSP.

Interestingly, not even 50 per cent of households growing various crops for sale are aware of procurement agencies.

Situation Assessment of Agricultural Households and Land and Holdings of Households in Rural India – 2019 (National Sample Survey – NSS 77th round) revealed the MSP awareness data. About 40.7 percent of paddy growing households are aware of MSP (July- December 2018) and 52.8 per cent paddy growing households reported awareness about MSP between January- June 2019. About 39.8 per cent sugarcane growing households, followed by 31.7 per cent bajra growing households, 30.7 per cent cotton grower households and 28.3 per cent soybean growing households reported awareness about MSP (July –December 2018).

Between January 2019-June 2019 over 50 per cent of sugarcane growing households reported awareness about MSP. About 41.2 per cent of arhar growing households, 39.2 rapeseed grower households and 37.1 per cent of wheat grower households reported awareness about MSP.

Procurement agencies

The percentage of households that reported awareness about procurement agencies under MSP range between 3.1 to 40.3 per cent (except sugarcane). Paddy growing households top the chart when it comes to the maximum percentage of output sold under MSP.

The Shanta Kumar Committee report, released in 2015 asserted that only six per cent of all farmers benefited from MSP through the sale of food grains to an official procurement agency, according to data of the NSS 70th round.

The government of India announces Minimum Support Prices (MSP) for 22 major agricultural commodities of Fair Average Quality (FAQ) each year in both the crop seasons after taking into account the recommendations of the Commission for Agricultural Costs and Prices (CACP). The procurement at MSP is done by the Union and State Agencies under various schemes of the government.

Union Minister of Agriculture and Farmers Welfare Narendra Singh Tomar told the Lok Sabha in July this month that MSP policy has nothing to do with new farm laws. Farmers are free to sell their produce to the government procurement agencies at MSP or Agricultural Produce Market Committee (APMC) markets or through contract farming or in the open market, whichever is advantageous to them.