The NITI Aayog (erstwhile Planning Commission) has conducted a study entitled “Efficacy of Minimum Support Prices on farmers”, in 2016. The study has found, among other things, that MSP declared by the Government has encouraged 78% of the farmers covered under the study for adopting improved methods of farming such as high yielding varieties of seeds, organic manure, chemical fertilizer, pesticides and improved methods of harvesting etc.
Government extends price support for paddy and wheat through the Food Corporation of India (FCI) and State Agencies. Under this policy, whatever food grains are offered by farmers within the stipulated period & conforming to the specifications prescribed by Government are purchased at MSP by the State Government agencies including FCI for Central Pool.
Additionally, Oilseeds, pulses and copra of Fair Average Quality (FAQ) are procured from registered farmers under Price Support Scheme of the Umbrella Scheme of Pradhan Mantri Annadata Aay SanraksHan Abhiyan (PM-AASHA), as per its prescribed guidelines.
The Union Budget for 2018-19 had announced the pre-determined principle to keep MSP at levels of one-and-half times of the cost of production. Accordingly, Government has increased the MSPs for all mandated Kharif (including wheat), Rabi and other commercial crops with a return of at least 50 per cent over all India weighted average cost of production from the agricultural year 2018-19.
