Wheat MSP increase likely to be nominal at Rs 50 a quintal

Given high wholesale-price food inflation of over 18 per cent in September, the Cabinet Committee on Economic Affairs (CCEA) on Thursday is likely to clear only Rs 50 a quintal hike in minimum support price (MSP) of wheat for 2014-15 year.

The recommendation to this effect was earlier given by the Commission for Agricultural Costs and Prices (CACP).

The recommendation is to hike the wheat MSP to Rs 1,400 a quintal from the existing Rs 1,350 a quintal.

In the 2013-14 crop marketing season (April-March), the CACP had recommended freezing of wheat MSP at the existing level of Rs 1,285 a quintal. The commission had said the huge wheat stocks with the government did not make raising MSP a feasible option.

However, following strong opposition from various quarters, it had to review its decision. The government later fixed the wheat MSP at Rs 1,350 a quintal - an increase of Rs 65 a quintal.

Wheat is usually sown from November and the crop harvested around March. India produces 90-95 million tonnes of wheat every year. State governments have recommended wheat MSP in the range of Rs 1,450-3,200 a quintal for next year.Officials said the CCEA might go with the CACP recommendations since food inflation was already running over 18 per cent in WPI terms, even as the rate of price rise in wheat declined to 5.90 per cent in September from 7.60 per cent in August. Besides wheat, CCEA will also take a call on increasing the MSP of five other rabi (winter) crops - barley, gram, masur, mustard seed and safflower for 2014-15.

CACP had also recommended a Rs 50 a quintal increase in the MSP of mustard, from Rs 3,000 to Rs 3,050. Mustard is the main oilseed crop grown during the rabi season. Among other crops, MSP of barley is expected to rise to Rs 1,100 a quintal, gram to Rs 3,100 a quintal, masur to Rs 2,950 a quintal, and safflower to Rs 3,000 a quintal for 2014-15.

CCEA might also raise import duty on edible oils from 7.50 per cent to ten per cent to protect the domestic industry.

While inflation in raw food items ran high for the past few months, prices in fact declined for the three straight months till September in case of edible oils.