The Cabinet Committee on Economic Affairs has raised the minimum support price (MSP) for the current year’s paddy crop by Rs 80 a quintal. The hike is however, below the recommendation of Rs 160 by the Commission for Agricultural Costs and Prices (CACP), which was inclusive of a bonus of Rs 80 over and above the MSP.
MSP is the price at which the government procures paddy from farmers and the Paddy MSP (common grade) was at Rs 1,000 a quintal last year. The new MSP would work out to Rs 1,080/quintal for common paddy and Rs 1,110/quintal in the case of fine (‘Grade A') varieties grown mainly in Punjab and Haryana.
While the Rs 80 bonus recommended by the CACP and proposed by the Agriculture Ministry has not received the Cabinet’s nod due to opposition from the Finance and Food Ministries, as it may put pressure on food inflation, however CACP argued that higher paddy MSP is necessary as cost of production has risen by 20 per cent in last one year and some officials are still hopeful that it may still be announced before the crop gets harvested from October.
In case of pulses much in line with the last year’s hefty hike, the MSPs for arhar (pigeon-pea) and moong (green gram) have been fixed Rs 100/quintal higher than the levels recommended by the CACP. Moreover, an additional Rs 500/quintal incentive would be paid on arhar, moong and urad (black gram) sold to government procurement agencies during the harvest/arrival period of two months. The purchasing price of tur (arhar) has been increased by 15% to Rs 2,300 a quintal. The MSP of moong and sesamum has been increased by 9.52% and 3.64% to Rs 2,760 and Rs 2,850 a quintal, respectively. However, the procurement prices of crops like maize, urad, cotton and bajra have been kept unchanged.
In a bid to boost output of the other major importable crop group - oilseeds - the Centre has raised the MSP of soyabean, groundnut, sunflower and sesamum by 17-19%.
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