Cabinet approves enhanced MSP for Rabi Crops of 2016-17 season
Announces Bonus for Gram, Masur, Rapseed/Mustard and Safflower cultivation

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 Rabi Crops of 2016-17 Season. Further, to incentivise cultivation of pulses and oil seeds, in the country Government has announced a bonus on these crops, payable over and above the following approved MSP.

Commodity	MSP for 2015-16 Season (Rs / Quintal)	MSP approved for 2016-17 (Rs / Quintal)	Increase
			Absolute (Rs / Quintal)	percentage
Wheat	1525	1625	100	6.6
Barley	1225	1325	100	8.2
Gram	3500 (includes bonus of ₹ 75 per quintal)	4000 (includes bonus of ₹ 200 per quintal)	500	14.3
Masur (Lentil)	3400 (includes bonus of ₹ 75 per quintal)	3950 (includes bonus of ₹ 150 per quintal)	550	16.2
Rapeseed / Mustard	3350	3700 (includes bonus of ₹ 100 per quintal)	350	10.4
Safflower	3300	3700 (includes bonus of ₹ 100 per quintal)	400	12.1

The approval to increase MSPs is based on the recommendations of Commission for Agricultural Costs and Prices (CACP) which while recommending MSPs 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 on the rest of the economy, besides ensuring rational utilization of production resources like land and water.

The recommendation of CACP being the expert body, are generally accepted as such.  However, to incentivise cultivation of pulses and oilseeds, the Cabinet has decided to give a bonus of ₹ 200/- per quintal for Gram, a bonus of ₹ 150/- per quintal for Masur/Lentil and a bonus of ₹ 100/- per quintal each for Rabi oilseeds viz. Rapeseeds/Mustards and Safflower, over and above the recommendations of the CACP. There is an increasing gap between the domestic demand and supply of pulses and oilseeds as a result of which 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.

Food Corporation of India (FCI) will be the designated central nodal agency for price support operations for cereals, pulses and oilseeds. To supplement the efforts of FCI, the National Agricultural Cooperative Marketing Federation of India Limited (NAFED), National Cooperative Consumers' Federation (NCCF), Central Warehousing Corporation (CWC) and Small Farmers Agri - Business Consortium (SFAC) may also undertake procurement of oilseeds and pulses as per their capacity.

Background:

Besides increase in Minimum Support Prices (MSP) of Rabi crops, Government has taken several farmer friendly initiatives. These, inter-alia, include the following:

• The Government had declared a bonus, over and above the MSP, of ₹ 75 per quintal for Rabi pulses of 2016-17 marketing season, a bonus of ₹ 425 per quintal for Kharif pulses viz. Arhar, Moong and Urad, a bonus of  Rs 200 per quintal for Sesamum and a bonus of ₹ 100 per quintal for Groundnut, Sunflower, Soyabean and Nigerseed.
•  A new crop insurance scheme 'Pradhan Mantri Fasal Bima Yojana' has been launched by the Government. Under this scheme, the premium rates to be paid by farmers; are very low- 2% of sum insured for all Kharif crops, 1.5% for all Rabi crops' and 5% for commercial and horticulture crops. The new insurance scheme involves use of simple and smart technology through phones & remote sensing for quick estimation and early settlement of claims. The Government has also launched a Mobile App "Crop Insurance" which will help farmers to find out complete details about insurance cover available in their area and to calculate the insurance premium for notified crops.
• The Government has also launched a scheme to develop a pan India electronic trading platform under 'National Agriculture Market' (NAM) aiming to integrate 585 regulated markets with the common e-market platform. Each State is being encouraged to undertake three major reforms - allow electronic trading, have a single license valid throughout the State and a single entry point market fee. It will also enable farmers to discover better prices for their produce. 221 markets in 11 States| have already been brought on the e-NAM platform.
• Soil Health Cards are being issued to farmers across the country. These will be renewed every two years. The card provides information on fertility status of soil and a soil test based advisory on use of fertilizers. As on 30th September, 2016, 295.56 lakh Soil Health Cards have been distributed.
• Under Pramparagat Krishi Vikas Yojna (PKVY), the Government is promoting organic farming and development of potential market for organic products.
• The Pradhan Mantri Krishi Sinchai Yojana is being implemented with the vision of extending the coverage of irrigation 'Har Khet ko Pani' and improving water use efficiency 'Per Drop More Crop ' in a focused manner with end to end solution on source creation, distribution, management, field application and extension activities.
• Government is focusing on improving production and productivity of crops such as rice, wheat, coarse grains and pulses under the National Food Security Mission.
• A dedicated Kisan Channel has been started by the Doordarshan to provide 24 x 7 information in the hands of farmers regarding weather updates, agri-mandi data etc.
• Government is encouraging formation of Farmer Producer Organisations.
• To stabilize prices of pulses and onions, Government has decided to create buffer stocks of pulses and has imported pulses and onions under the Price Stabilization Fund.
•  A handbook for women farmers 'Farm Women Friendly Hand Book' containing special provisions and package of assistance which women farmers can claim under various on-going Missions/ Submissions/ Schemes of Department of Agriculture] Cooperation & Farmers Welfare has been brought out. Women farmers/beneficiaries could approach the nearest Project Director (ATMA) / Deputy Director (Agriculture) office at District or Block Technology Manager/Assistant Technology Managers at Block level for instant help and facilitation for availing the benefits.
• With the above measures taken, the Government has set a target to double the farmers' income by 2022.

Minimum Support Price increase plus targeted bonuses incentivise pulses and oilseeds cultivation and strengthen procurement and price support. Increase in Minimum Support Price for Rabi crops and payment of bonuses above MSPs for Gram, Masur, Rapeseed/Mustard and Safflower to incentivise cultivation; FCI designated as central nodal agency for price support operations with cooperative and public-sector agencies to supplement procurement; complemented by subsidised crop insurance, an electronic trading platform, soil health card distribution, irrigation efficiency and other measures to raise farmer incomes and stabilise pulses and oilseeds markets.