The Cabinet might discuss increasing the minimum support price (MSP) of kharif crop for the 2015-16 season at a meeting expected to be held on Wednesday.
Officials said the Commission for Agriculture Costs and Prices (CACP) had recommended Rs 50 a quintal increase in paddy MSP for the 2015-16 season and the agriculture ministry favoured this.
But a higher increase of almost Rs 80-100 a quintal cannot be ruled out, given that MSP of all foodgrain since the National Democratic Alliance government came to power has not risen by more than Rs 50.
The MSP of common grade paddy now stood at Rs 1,360 a quintal, while that of Grade-A paddy was Rs 1,400 a quintal.
For other kharif crop such as cotton, jute, pulses, soybean and other oilseeds, CACP had suggested an increase of Rs 100-150 a quintal.
However, a section within the government is of the opinion a small increase in paddy MSP might not go down well with the rural folks, hit hard by unseasonal rains and staring at a possible drought in some parts. A final decision rests with the Cabinet.
In a related development, the government would soon finalise its options to keep the prices of pulses under check. Officials fear a poor monsoon might affect output, leading to an increase in prices.
Officials said a high-level meeting was held on Tuesday to discuss the situation. The government might direct state agencies to import pulses if prices rise sharply. It is identifying countries from where pulses could be imported.
The government might also consider re-imposing the stock limit on major producers of pulses, such as Maharashtra and Gujarat. Maharashtra had recently lifted the stock limit on pulses.
Pulses prices in the retail markets have moved up by more than 50 per cent in the past year, mainly due to low production in the 2014 kharif season.