Stock in hand, govt marginally hikes MSP of paddy, pulses for kharif season

Saddled with large stock of cereal and pulses, the government on Wednesday marginally increased the minimum support price (MSP) of paddy, along with arhar, moong, and urad for 2019-20 kharif season.

The reason for increasing the MSP could also be that the wholesale prices of pulses — especially arhar — is already higher than it.

According to an official statement, the MSP of common-grade paddy was raised by 3.71 per cent to Rs 1,815 a quintal from Rs 1,750 per quintal. For arhar, the increase was 2.2 per cent from Rs 5,675 a quintal to Rs 5,800 per quintal.

The MSP of moong was increased by 1.07 per cent from Rs 6,975 per quintal to Rs 7,050 a quintal while that of urad was increased by 1.78 per cent from Rs 5,600 per quintal to Rs 5,700 a quintal.

In other crops, too, except for soybean (yellow) and ragi, the increase in MSP has been less than 5 per cent. The MSP of soybean has been increased by 9.14 per cent from Rs 3,399 per quintal to Rs 3,710 a quintal.

The MSP of maize was raised by 3.52 per cent from Rs 1,700 per quintal to Rs 1,760 per quintal, while that of medium staple cotton was increased by 2.03 per cent from Rs 5,150 per quintal to Rs 5,255 a quintal. The MSP of long staple cotton was increased by 1.83 per cent from Rs 5,450 per quintal to Rs 5,550 a quintal.

The statement showed that despite the nominal hike in MSP, their return over cost of production was at least 50 per cent for most crops, as promised by the government.

“The MSP has been consistently increased by our government and is part of the strategy to double farmers’ income by 2022,” Agriculture Minister Narendra Singh Tomar told reporters after the meeting of the Union Cabinet.

Data showed that in case of kharif pulses (arhar, moong and urad) the increase MSP in 2019-20 was the lowest in more than three years. In case of paddy, too, the 3.71 per cent increase in MSP was the lowest since 2016-17 kharif season when the prices were increased by 4.26 per cent.

The government’s rice and wheat stocks in the central pool as of June 1 was estimated to be around 74.14 million tonnes, which was almost 80.3 per cent more than the buffer stock and strategic norm requirement. In addition, perhaps for the first time ever, the government’s main procurement agency for pulses, Nafed is holding around 4.1 million tonnes of pulses, which it has procured over the years under MSP operations from states.

Experts said with so much in hand, it remains to be seen how much more the government can purchase under the much-talked-about PM-ASHAA programme if prices drop further below the MSP.

In the 2018-19 rabi procurement season, the government’s purchases under PM-ASHAA was less than 10 per cent of the total production, though officials said a big reason for this could be that market prices were more than the MSP.

“The government must take its own PM-ASHAA scheme seriously and infuse substantial funds and act efficiently and quickly by getting into the market for stabilising prices,” said Avik Saha, convenor of Jai Kisan Andolan, a lobby group for farmers.