Centre clears big MSP boost for kharif crops
The revised MSPs, which act as benchmark prices at which government purchases farm produce, especially cereals, come just ahead of the monsoon sowing season
The Union Cabinet, chaired by Prime Minister Narendra Modi days into the start of his third term, on Wednesday approved raising minimum support prices (MSPs) for an array of kharif, or summer-sown crops, setting them at a minimum of 1.5 times the cost of production so that farmers get 50% returns.
The revised MSPs, which act as benchmark prices at which government purchases farm produce, especially cereals, come just ahead of the monsoon sowing season, which supplies half of the country’s annual food supply. In step with its long-standing policy, the government announced bigger hikes in the floor prices of pulses and oilseeds to boost their cultivation as India still relies on imports of these items to meet domestic demand.
Govt raises MSPs for kharif season, focus on pulses, oilseeds
The government set the floor rate for common variety of rice, the summer staple, at ₹2,300 a quintal (100 kg), an increase of ₹117 and up 5% from the previous season’s MSP of ₹2,183 a quintal.
“The third term of PM Modi is very important as it focuses on continuity with change through many decisions for farmers’ welfare,” said Union information & broadcasting minister Ashwini Vaishnaw, who announced the decisions.
The Cabinet also cleared the construction of a mega port in Vadhavan, Maharashtra, at a cost of ₹76,200 crore, building of a new terminal at Varanasi airport, and an offshore wind energy project that will generate 1GW of power. The Cabinet also announced the National Forensic Infrastructure Enhancement Scheme, under which campuses of the National Forensic Sciences institute will be set up across states.
Among key varieties of pulses, the government hiked the MSP of pigeon pea (tur) to ₹7,550 a quintal, up 7.8% from the previous season’s rate of ₹7,000 a quintal. The MSP for green gram (moong) has been fixed at ₹8,682, which is 1.5% higher than last year. The floor rate for urad, another key pulse variety, was raised to ₹7,400 a quintal, up 6.4% from the previous kharif season.
In the oilseeds category, which yield vegetable oils, the MSP for groundnut has been set at ₹6,783 a quintal from ₹6,377 earlier, an increase of 6%. The rate for soyabean has been set at ₹4,892, which represents an increase of 6.3% from ₹4,600 a quintal in the previous year.
The government also hiked the floor rate of sunflower seeds to ₹7,280 a quintal from ₹6,760, up 15.6%, the largest jump in prices among oilseeds.
“The Modi government in its previous two terms set a base and strong foundation for economic development, be it roads, infrastructure or logistics. In this third term, the government will build on this foundation to take the country forward,” Vaishnaw said.
Farmers are currently preparing to plant a range of crops, such as rice, soyabean, pulses, cotton and sugarcane, which depend on the June-September monsoon system. If the summer rains are robust as predicted, it will help boost sowing and coverage of major crops critical to keep a lid on prices.
Sufficient harvests will also allow the world’s second-largest rice and sugar producer to lift bans on export of these commodities and calm local prices.
Farm incomes are critically dependent, at least in the case of rice and wheat, on the MSP-backed procurement programme. Yet, only about 32.2% of paddy growers and 39.2% of wheat farmers were aware about MSP, according to the 70th round of National Sample Survey for 2012-13. Crucially, only 13.5% rice farmers and 16.2% wheat farmers were able to sell their produce at MSPs, the data showed.
Farmers tend to be benefit from MSPs in states where procurement mechanism – or the government’s buying of farm produce – is robust, such as Punjab, Haryana and Madhya Pradesh for wheat and Punjab, Chhattisgarh, Andhra Pradesh and Haryana in case of paddy.
Among commercial crops, the MSP for cotton has been fixed at ₹7,121, which is 7% higher than the earlier rate of ₹6,620. The MSP for bajra or pearl millet has been set at ₹2,625 per quintal, offering significant support for millet farmers.
The government announced in Union Budget 2018-19 that it would increase MSPs in a manner that ensures 50% returns to farmers.
Punjab faces kharif crop diversification challenge
Farm unions, however, said the increases in MSP were not enough to cover increasing costs. “The hikes in MSP hardly covers rising input costs on labour, pesticides and diesel incurred by farmers. Moreover, MSP is merely symbolic for most commodities other than paddy because the government either doesn’t procure them or procures token quantities,” said Rakesh Tikait, leader of the Bharatiya Kisan Union.
“The strategy of reserving bigger hikes in MSP for pulses and oilseeds should be accompanied by sufficient procurement to achieve self-sufficiency in these commodities,” said Abhishek Agrawal, an analyst with Comtrade.