Agri ministry for higher MSP in rabi crops

Besides advocating a 5-10% increase, the ministry has sided with the recommendation of CACP for oilseeds and pulses

The Union ministry of agriculture is not in favour of a static minimum support price (MSP) for any commodity. In its suggestions for MSP for the ensuing rabi season, the ministry said, for wheat and barley, the government should fix a marginally higher price — up to 5-10 per cent year-on-year — to recover at least part of the transportation costs that have gone up sharply in the past year.

Soon, the proposals will be forwarded to the cabinet for final approval.

Reportedly, the Commission of Agricultureal Costs and Prices (CACP), which is mandated for working out MSP for crops before the sowing seasons, has recommended no increase in the support price for wheat and barley for rabi 2013-14.

It proposes to maintain wheat and barley MSP at Rs 1,285 per and Rs 980 for the rabi marketing season (April 2012-March 2013).

Besides advocating a 5-10 per cent increase, the ministry has sided with the recommendation of CACP for oilseeds and pulses. The ministry had also suggested a bonus for wheat but according to official sources, it comes with a rider. The bonus will be given to farmers only if the government decides to restrict or ban wheat exports for the season.

Apart from cereal crops like wheat and barley, the other crops for rabi season are gram, lentil, rapeseed-mustard and safflower. Reportedly, the CACP has suggested an increase of Rs 200 and Rs 100 for gram and lentil (masur dal) to Rs 3,000 and Rs 2,900 per quintal, respectively.

Similarly, for edible oilseeds, the commission has suggested an increase of Rs 500 and Rs 300 to Rs 3,000 per quintal for mustard and Rs 2,800 for safflower, respectively.

While the rabi season starts from October , the harvesting of the crops is undertaken in March-April. The government aims to achieve foodgrains production of 130 million tonnes (mt) in 2012-13 of which 86 mt is wheat and the rest rice. MSP is the floor price set by the government for procurement of agricultural commodities.

If the market prices of these commodities fall below MSP, then government procurement agencies like Food Corporation of India and National Agricultural Cooperative Marketing Federation of India procure these crops at MSP.

In markets across India, wheat is priced in the range of Rs 940-2,000 per quintal against an MSP of Rs 1,285 and barley at Rs 1,275-1,385 while the MSP is at Rs 980.

Similarly, for gram and lentil, prices are in the range of Rs 3,800-5,200 per quintal and Rs 5,300-7,200 against an MSP of Rs 2,800 for both varieties of pulses. For rapeseed-mustard, prices are in the range of Rs 3,750-6,525 per quintal against an MSP of Rs 2,500.