Wheat MSP hiked by Rs 110/quintal

Tribune News Service

New Delhi, October 18

The Union Cabinet today approved a hike of up to 9 per cent in the minimum support price (MSP) of six rabi crops for next year’s marketing season, with a Rs 110 per quintal increase for wheat to boost domestic production and the income of farmers.

The wheat MSP has been raised from Rs 2,015 to Rs 2,125 a quintal, a hike of 5.46 per cent. The highest hike of Rs 500 per quintal, however, has been for lentil (masur), followed by Rs 400 for rapeseed and mustard. The aim appears to be to encourage farmers to shift from grains to high-value oilseeds and pulses, which are imported.

The MSP for rapeseed and mustard was raised by almost 7.9 per cent to Rs 5,450 a quintal and of lentil by over 9 per cent to Rs 6,000 a quintal. The support price of barley was increased by Rs 100 per quintal to Rs 1,735, gram by Rs 105 to Rs 5,335 and safflower by Rs 209 per quintal to Rs 5,650. The Agriculture Ministry had recommended an increase of up to 9% following recommendations from the Commission for Agricultural Costs and Prices, sources said. The hike, which critics said was “less than the current inflation rate”, came amid lower stocks of wheat and its rising prices in the retail market. Farmers dismissed the increase as “paltry” in view of the rising input costs.

Officials said a higher support price would have triggered more inflation and a rise in market prices. “The rate of return is 104% over cost for rapeseed and mustard, 100% for wheat, 85% for lentil, 66% for gram, 60% for barley and 50% for safflower,” they added.

Agriculture expert Sudhir Panwar called the MSP “of national importance because of the higher spot market price of all these crops”. He said private players procured every kg of mustard from Haryana markets.

“The hike in wheat (5.4%), gram (2%), safflower (3.8%) is lower than 7% hike in dearness allowance while increase of 9% in lentil and 7.9% in mustard is to provide positive signal for sowing of pulses and oilseeds for import substitution,” he said.

With wheat prices ruling higher than the increased MSP in the open market, it remains to be seen if farmers would be willing to sell their produce to official procurement agencies. Due to higher prices, farmers have been selling their produce to private traders, resulting in a drop in official procurement.

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