Hoping to remedy its anti-farmer image ahead of elections due next year, the government on Wednesday substantially enhanced support prices for 14 summer crops, including paddy, for the current year.
The Cabinet Committee on Economic Affairs on Wednesday cleared an average 4-52 per cent increase in minimum support prices (MSP) of kharif crops over the previous year.
Briefing reporters, Home Minister Rajnath Singh said the Centre has kept its promise to farmers. The enhanced MSP rates will improve their income and have a positive impact on the wider economy, he said.
“We will ensure that grains are procured at least at MSP rates,” he added.
MSP for kharif crops have been fixed at at least 50 per cent more than the cost of production, he said, adding that the decision will put an additional burden of over ₹15,000 crore on the exchequer. He, however, clarified that the calculations had been made on an A2 + Family labour basis, not on comprehensive costs (C2), as demanded by many farmer organisations.
While the support price for paddy went up by ₹200 to ₹1,750 per quintal as compared to the last season, the increase in cotton MSPs was 20-28 per cent. The highest jump in MSP was reserved for ragi, whose floor price has gone up to ₹2,897 from ₹1,900 in last kharif season.
Reacting to the development, MS Swaminathan, who headed the previous national commission on farmers, said that hiking the MSP rates is “a welcome first step” in tackling the agrarian crisis. “MSP announced is higher in absolute terms, but below the recommended level,” he said.
Mere jumla: Opposition
The Opposition parties, on the other hand, dismissed the announcement as jumla (gimmicks) . “They promised to implement the formula of cost plus 50 per cent as MSP. Had it been implemented in 2014, the farmers could have got more than ₹2-lakh crore by now,” said Congress spokesperson Randeep Singh Surjewala.
Bhartruhari Mahtab, the BJD leader in the Lok Sabha, said the increase in the MSP of paddy was “too low”. “The increase of ₹200 is too low. The BJD government in Odisha had asked the Centre to announce an MSP of at least ₹2,930 a quintal of paddy as the input cost in Odisha is higher than the calculations made by the Centre,” he said.
The All India Kisan Sabha termed the move a “historic betrayal” of farmers, as the Centre didn’t go for the promised C2 + 50 per cent and assured procurement. It asked the Modi government to “stop hoodwinking farmers with an eye on elections.”
Credit rating agency Crisil said the weighted average MSP increase would 13 per cent.
Though this was much higher than the annual average MSP growth of 3.6 per cent between 2014 and 2017, it was much lower than the 19.3 per cent registered between 2009 and 2013, it said.