With kharif sowing to pick up, the Cabinet Committee on Economic Affairs has approved increasing the minimum support prices between 15.7 per cent and 53 per cent.

Such an increase will benefit crops such as paddy, urad, cotton and maize besides others.

“This increase has been made on the basis of recommendations given by Commission for Agricultural Costs and Prices (CACP). However, the CCEA has referred the MSP proposal back for two pulses such as tur and urad to seek some more clarifications,” the Home Minister, Mr P. Chidambaram, said.

The most common kharif crop paddy (common) has seen minimum growth of over 15 per cent, while maximum increase has been done in the case of jowar with over 53 per cent. Ragi follows next in terms of increase. At the same time, MSP for urad, groundnut, soyabean and sunflower has been increased by over 30 per cent.

This increase has come at a time when annual rate of inflation based on wholesale price index has exceeded 7.5 per cent. Though it is lower than the previous year inflation of over 9 per cent, but still prices of various non-food items such as soyabean, niger seed, groundnut seed and cotton have gone up. MSP of all these have been raised.

Simultaneously, ragi and jowar are among the primary food products, whose prices have gone up during May. There is feeling that increase in the MSP of various food crops can increase the inflation, but the impact can be seen only in the latter half of the current fiscal year.

Meanwhile, the Government has its own argument for raising the price. It believes that cost of production has gone up for the farmers, so it was required to increase the MSP. It also believes, with increase in the overall production the prices will come down and it will have some impact on inflation.

shishir.s@thehindu.co.in

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