Food ministry disfavours CACP's proposal on paddy MSP rise

The food ministry has disfavoured the proposal of the Commission for Agriculture Costs and Prices (CACP) to rise the support price of paddy by Rs 160 a quintal to Rs 1,160 a quintal for 2011-12 crop year.

Paddy MSP (common grade) was at Rs 1,000 a quintal last year.

The CACP, which suggests minimum support price (MSP) of 40 agri-commodities, has recommended support price for paddy (common grade) at Rs 1,080 a quintal and on top of it a bonus of Rs 80 a quintal for the 2011-12 crop year (July-June).

According to official sources, “The Food Ministry is in favour of the paddy MSP of Rs 1,080 a quintal and not a bonus of Rs 80 a quintal as it may cause pressure on food inflation.”

The ministry is also of the view that higher paddy MSP will increase government’s subsidy burden, sources said. Rice is grown in both Kharif and Rabi season. The Kharif sowing begins with the start of the south west monsoon in June and harvest starts from October, 2011.

Currently, the concerned authorities like Agriculture Ministry, Food Ministry and Finance Ministry are vetting the CACP’s MSP proposal for paddy and other crops for 2011-12.

The CACP has argued that higher paddy MSP is necessary as cost of production has risen by 20 per cent in last one year. The country’s rice output cannot be enhanced to meet demand of the proposed National Food Security Act unless farmers are paid remunerative price, it noted.

Meanwhile, sources said that the Agriculture Ministry has recommended paddy MSP of Rs 1,160 a quintal excluding the bonus part. The ministry’s suggestion is in line with CACP.