The Government has announced a hike in the minimum support price (MSP) ranging from 15 per cent to 38 per cent for rabi crops such as wheat, mustard and gram.
The MSP for wheat to be marketed in 2012-13 has been increased by Rs 165 or 15 per cent to Rs 1,285 per quintal or 100 kg. Last year the Government had procured wheat at Rs 1,170 a quintal, which included a bonus of Rs 50 over and above the MSP of Rs 1,120.
The Cabinet Committee on Economic Affairs on Tuesday approved the MSP for the rabi 2011-12 crop, sowing of which started this month.
Ever since the UPA Government came to power in 2004, the MSP for wheat has more than doubled after factoring in the latest hike (see table). Besides wheat, the Centre's focus this time has been on oilseeds, the MSPs of which have been hiked by 35-38 per cent.
The support price for mustard has been increased by Rs 650 to Rs 2,500 a quintal, while for safflower it has been raised by Rs 700 to Rs 2,500 per quintal. This comes amidst concerns over the spiralling edible oil import bill and the substantial increase in the international prices of palm and soyabean oil.
In pulses, the MSP for both chana (gram) and masur (lentils) has been fixed at Rs 2,800 a quintal. The support price for gram has been increased by Rs 700 per quintal, whereas for lentil the increase is Rs 550 per quintal over the previous year's MSP.
The hike in MSP for gram and lentil should encourage more farmers to take up the cultivation of these pulses in the rabi season. The Government has created a contingency plan to boost the output of rabi pulses by an additional 2.78 million tonnes to offset the projected kharif shortfall of 0.7 million tonnes on account of lower coverage in States such as Karnataka, Maharashtra and Andhra Pradesh. This contingency plan includes area expansion and the productivity enhancement of pulses. The MSP for barley has been raised by Rs 200 per quintal and fixed at Rs 980 per quintal.