The Agriculture Ministry has proposed a Rs 100 per quintal bonus to paddy farmers over and above the support price of Rs 1,250 per quintal recommended for 2012-13 crop year.

In a proposal moved for the Cabinet Committee on Economic Affairs’ consideration, the Ministry has accepted the recommendation of the Commission for Agriculture Costs and Prices (CACP) on minimum support price (MSP) for paddy and other kharif crops.

CACP is a statutory body that advises the Government on farm pricing policy.

However, the Ministry has separately proposed a bonus of Rs 100 per quintal over and above the paddy MSP for 2012-13.

“A bonus of Rs 100 per quintal has been recommended over and above the paddy MSP for 2012-13 keeping in view the rising cost of production, squeezing of farmers’ margins and to further incentivise paddy growers,” sources said.

The bonus proposal would cost the government’s exchequer Rs 2,621.31 crore assuming procurement of 39.3 million tonnes in 2012-13, they added.

The Ministry wants the CCEA to consider the proposal of paddy MSP and bonus before sowing picks up later this month.

According to sources, the Ministry has proposed 15.7 per cent increase in paddy MSP for 2012-13 crop year (July-June).

It has suggested an MSP of Rs 1,250 and 1,280 per quintal for ‘common’ and ‘A’ grade varieties of paddy for 2012-13 against Rs 1,080 and Rs 1110 per quintal, respectively, in the last year.

Paddy is grown in both kharif (summer) and rabi (winter) season. The kharif sowing begins with the start of the south west monsoon in June and harvest starts from October.

On account of a sharp increase in paddy MSP and good monsoon, the country is estimated to have produced a record 103.41 mt of rice in 2011-12 crop year.

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