Small Mercies

For, barring paddy and to some extent oilseeds, the support prices have become irrelevant as the market prices invariably rule higher than the statutory minimum levels. But in the case of rice, as also wheat, the difference between the minimum support price and procurement price has disappeared, making the former virtually the benchmark for determining open market prices, at least during the main marketing season. It is for this reason that the government needs to be extremely careful in fixing the support prices of these two major staple cereals.

The indiscriminate hikes in the past, allowed primarily on political considerations, have already priced Indian grains out of the international market. While wheat exports have dried up completely, those of rice have shrunk drastically. The biggest damage to the agricultural price structure was, indeed, inflicted last year when the CACP recommendations were flouted in the case of both rice and wheat.

 

While the support price of rice was fixed Rs 25 higher than the CACP