New Delhi, October 30
Forced to import wheat to fill the shortfall in the buffer stock, the UPA government today increased the rabi crop minimum support price it would pay to farmers for wheat to Rs 750 per quintal and Rs 1715 for mustard.
The wheat procurement programme in 2006 fell far short of the target of 16 million tonnes, as the government struggled to compete with the higher prices offered by private traders.
The wheat MSP fixed for the 2006-07 season is higher by Rs 100 per quintal as against last year’s MSP of Rs 650. However, the government announced a Rs 50 per quintal bonus in April, taking the effective MSP to Rs 700 for last year.
The government ordered imports of 55 lakh tonnes of wheat as it could buy only 92 lakh tonnes from farmers against the targeted 164 lakh tonnes. Despite that, domestic prices had not eased and Agriculture Minister Sharad Pawar did not rule out further wheat imports.
“The MSP for wheat has been fixed at Rs 750 per quintal. This is an adequate and remunerative price,” Finance Minister P. Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs.
Mr Pawar said, “The increase in MSP is likely to put an additional burden of Rs 400-500 crore”.
Mr Chidambaram said the MSP for wheat at Rs 750 for 2006-07 was higher than the recommendations of the Commission on Agricultural Costs and Prices (CACP), which had recommended a price of Rs 700.
The Agriculture Ministry had suggested MSP at Rs 750 plus bonus for higher wheat procurement, while the CACP had recommended Rs 700 as the MSP.
While the wheat production in 2004-05 was 68.64 lakh metric tonnes, it is going to increase to 69.48 metric tonnes according to the fourth advanced estimates.
With the global projection of lower wheat production due to unfavourable climatic condition, the government is hoping that the farmers would grow more in the country and the buffer stock norms would be met without imports
The CCEA, also fixed the MSP of mustard at Rs 1,715 per quintal as against Rs 1,600 suggested by the CACP. The Rabi season’s MSP is the same as last year.
The MSP for barley has been fixed at Rs 565 per quintal, for gram at Rs 1,455 and masur lentils at Rs 1,545, Mr Chidambaram said.
Interestingly, the land under mustard crop according to estimates has reduced in 2005-06. It is projected that the yield would witness an increase of 3.87 per cent.
The quantum of area decline in mustard production is 3.31 per cent. The total mustard production is expected to be 78.87 lakh tonnes as against 75.93 lakh tonnes in 2004-05.
Meanwhile, industry lobby group, Assocham, expressed the need for encouraging the oil seeds extension programme to meet the increasing demand for edible oils and mooted a proposal for the allocation of larger funds to the industry.
The chamber said such a measure would ensure higher productivity and dwell on new cost effective, post harvest technology including development of value added products from the residue.
In a paper submitted to the government, the industry body has projected that the demand for edible oil will increase to 15.6 million tonnes in 2010 from the current level of 12.0 million tonnes and 21.3 million tonnes by 2015.
