In the new proposal, the agriculture ministry has suggested increasing wheat MSP to Rs 1,385 a quintal
The Cabinet Committee on Economic Affairs (CCEA) is likely to approve tomorrow a proposal to raise the minimum support price (MSP) of wheat by Rs 100 per quintal to Rs 1,385 for the year starting April 2013.
It may also take a call on another proposal moved by the food ministry, for allowing additional export of 2.5 million tonnes of wheat from government godowns.
“The CCEA meeting is scheduled for tomorrow. The proposal of wheat MSP and export of FCI wheat are on the agenda list,” a source said.
Maintaining its stand on the wheat MSP hike, the agriculture ministry has moved a fresh proposal suggesting support price of Rs 1,385 per quintal for the 2012-13 marketing year (April-March), against Rs 1,285 per quintal this year. Sources said the ministry has turned down once again the recommendation of the Commission for Agricultural Costs and Prices (CACP) ion wheat MSP insisted on freezing at last year’s level, though with a bonus of Rs 40 per quintal.
In the previous meeting, CCEA had asked CACP, a government body that suggests farm pricing policy, to relook into the issue following differences between the agriculture and finance ministries.
In the new proposal, the agriculture ministry has toned down its demand and has suggested increasing the wheat MSP to Rs 1,385 per quintal, instead of Rs 1,400 per quintal.
Experts said farmers were waiting for the government to announce the MSP of wheat because they would decide on what crop to grow depending on the rise in prices.
Till last week, farmers had sown wheat in 25.3 million hectares, marginally lower than 25.7 million hectares in the same period last year.
According to sources, CCEA may also approve a proposal of the food ministry to allow export of additional 2.5 million tonnes of Food Corporation of India (FCI) wheat through public trading firms. In June, the government had allowed export of two million tonnes from FCI godowns to clear surplus stocks. The entire quantity has been contracted for shipment and 1 million tonnes of it has already been exported.
The food ministry has moved a proposal for additional wheat exports in the backdrop of surplus stocks still lying in the godowns, especially in Punjab and Haryana besides better prices been offered for Indian wheat in the global market. As on December 1, the government had a total stock of 68.2 million tonnes, of which 37.6 million tonnes is wheat.
The government godowns are overflowing with foodgrains stocks following record production and procurement in the last two years.
The contract has been put on hold and further payments have been stopped