Govt hikes MSP for wheat by Rs85/qtl; pulses MSP up Rs325/qtl
24 Oct 2019
Government on Wednesday hiked the minimum support price for wheat by Rs85 to Rs1,925 a quintal and that of pulses by up to Rs325 per quintal. The decision was taken at a meeting of the Cabinet Committee on Economic Affairs, headed by PM Modi.
MSP is the rate at which the government buys grains and pulses and other produce from farmers.
For the rabi crops of rabi marketing season (RMS) 2020-21, the highest increase in MSP has been recommended for lentil (Rs325 per quintal) followed by safflower (Rs270 per quintal) and gram (Rs255 per quintal) which is a major step towards increasing the income of farmers.
"In a move to increase farmers' income, the Cabinet has increased the MSP of rabi (winter-sown) crops for the current year," minister for information and broadcasting Prakash Javadekar told reporters after the meeting.
The CCEA has approved Rs85 per quintal hike in wheat MSP to Rs1,925 per quintal for the 2019-20 rabi crop, up from Rs1,840 per quintal last year.
MSP for barley has also been increased by Rs85 to Rs1,525 per quintal from Rs1,440 per quintal last year.
To encourage cultivation of pulses, the support price of masoor has been increased by Rs325 to Rs4,800 per quintal from Rs4,475 per quintal last year.
Similarly, the MSP for gram has been hiked by Rs255 to Rs4,875 per quintal for this year from Rs4,620 per quintal last year.
Among oilseeds, MSP for rapeseed/mustard has been increased by Rs225 to Rs4,425 per quintal for 2019-20 rabi crop from Rs4,200 per quintal during 2018-19.
For safflower, the MSP has been hiked by Rs270 to Rs5,215 per quintal from Rs4,945 per quintal last year.
Wheat is the main rabi crop, sowing of which will begin next month. The crop will be marketed from next April onwards.
The revised MSP for rabi crops announced this year is in line with the recommendations of the Commission for Agricultural Costs and Prices (CACP), which advises the government's on farm prices.
The increase in MSP for rabi crops for RMS 2020-21 is in line with the principle of fixing the MSPs at a level of at least 1.5 times of the all India weighted average cost of production (CoP), which was announced in the union budget 2018-19.
This year's increase in MSP of rabi crops for RMS 2020-21 provides higher than 50 per cent return (except safflower) over all India weighted average cost of production. The return over all India weighted average cost of production is 109 per cent for wheat; 66 per cent for barley; 74 per cent for gram: 76 per cent for lentil; 90 per cent for rapeseed and mustard and 50 per cent for safflower.
In cases of certain commodities, the MSP provides for comprehensive cost, which includes all paid out costs such as those incurred on account of hired human It/hour, bullock labour/machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel electricity for operation of pump sets etc, miscellaneous expenses and imputed value of family labour.
In the case of cereals, FCI and other designated state agencies would continue to provide price support to the farmers. State governments will undertake procurement of coarse grains with the prior approval of the central government and would distribute the entire procured quantity under NFSA. The subsidy will be provided only for the quantity issued under NFSA.
NAFED, SFAC and other designated central agencies would continue to undertake procurement of pulses and oilseeds. The losses, if any, incurred by the nodal agencies in such operations may be fully reimbursed by the government as per the guidelines.
Government has shifted its focus from production-centric approach to income-centric one. The government has also enhanced the coverage of Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) to all farmers - another major step in boosting the income of the farmers.
Besides, the PM-KISAN Yojana, announced in the interim budget for the year 2019-2020, provides small and marginal landholder farmer families with cultivable land holding up to 2 hectare across the country assured financial support of Rs6,000 per year.
The new umbrella scheme `Pradhan Mantri Annadata Aay SanraksHan Abhiyan’ (PM-AASHA) announced by the government in 2018 consists of three sub-schemes, ie, Price Support Scheme (PSS), Price Deficiency Payment Scheme (PDPS) and Private Procurement & Stockist Scheme (PPSS) on a pilot basis.