Barley MSP likely to remain unchanged

As in the case of wheat, the government is likely to keep the minimum support price (MSP) for barley unchanged for the 2013-14 crop marketing season (starting April 1, 2013), owing to supplies exceeding demand.

In a recent report on the price policy for rabi crops, the Commission for Agriculture Costs and Prices (CACP) has suggested freezing the barley MSP at Rs 980 a quintal. If the Union Cabinet accepts the recommendation, the MSP for barley would be unchanged for the first time in about 10 years.

Officials said a Cabinet note had been moved by the Department of Agriculture to that effect.

Market players, however, said the move wouldn’t have an impact on market prices, as the retail price of barley was much higher than its MSP. The prices of barley, largely used in the malt industry and as a poultry feed, have recorded a jump of about 30 per cent this year, owing to strong local and export demand. The crop is harvested during the rabi season.

“The CACP said if the government banned the export of barley, the MSP should immediately be raised 10 per cent,” said a senior government official.

India produces 1.3-1.6 million tonnes (mt) of barley a year. This year, production is expected to rise to about 2 mt. Despite strong demand from India’s growing malt-based beer industry, barley production has remained stagnant, owing to low yields and returns.

On an average, India consumes about 1.5 mt of barley a year, and, therefore, has a very low share in global trade, with exports at 25,000-40,000 tonnes in the past two-three years.

According to data from the US Department of Agriculture, India had exported 3,40,000 tonnes of barley in 2007-08 (its highest export of the crop), due to a drop in output in Ukraine and Russia in the 2007-08 season.