Govt raises MSP for paddy to Rs 850 a quintal

The Commission for Agricultural Costs and Prices (CACP), which recommends MSP for various crops, had suggested a MSP of Rs 1,000 a quintal for common variety paddy. The MSP of common variety paddy is Rs 645 a quintal and Rs 675 a quintal for higher-grade variety in 2007-08. A bonus of Rs 100 per quintal was offered over and above the MSP.

"Some states like Gujarat, Madhya Pradesh and Orissa wanted less than Rs 1,000 a quintal as MSP, while some others wanted more than that. In view of divergent views, the matter was today referred to the Prime Minister's Economic Advisory Council," Finance Minister P Chidambaram told reporters after a meeting of the Cabinet Committee on Economic Affairs.

In fact, Himachal Pradesh wanted MSP for paddy to be Rs 645 a quintal, less than even the current price of Rs 745 a quintal, he added.

For 'A' (higher) variety of paddy, CACP has recommended Rs 1,050 a quintal against the present MSP of Rs 775. The decision on it would also be taken in a calibrated manner, the Finance Minister said.