Financial Daily from THE HINDU group of publications
Friday, Feb 14, 2003
Agri-Biz & Commodities - Agricultural Policy
Govt leaves wheat MSP unchanged at Rs 620 Announces `one-time' drought bonus for farmers
NEW DELHI, Feb. 13
THE Government on Thursday announced a Rs 10 per quintal increase in the procurement price of wheat for the ensuing 2003-04 rabi marketing season (April-March).
Farmers will be entitled to receive a price of Rs 630 per quintal for their standing wheat crop, which is to be marketed in 2003-04.
This is against a minimum support price (MSP) of Rs 620 per quintal declared for the 2002-03 marketing season.
The increase of Rs 10 per quintal would be given as a `one-time special drought relief' amount, with the basic MSP to be left unchanged at last year's Rs 620 per quintal level. In the case of rapeseed-mustard, the MSP has been hiked from Rs 1,300 to Rs 1,330 per quintal.
Further, farmers have been given a drought relief bonus of Rs 10 per quintal, which means that the effective procurement price during the 2003-04 marketing season will work out to Rs 1,340 per quintal.
The Cabinet Committee on Economic Affairs (CCEA), which met here, also decided to increase procurement prices for other rabi crops.
The price for barley and safflower have been raised from Rs 500 and Rs 1,300 per quintal to Rs 505 and Rs 1,305 per quintal, respectively, with the enitre increase taking the form of an additional Rs five per quintal drought bonus.
For gram and masur, the MSP itself has been hiked from Rs 1,200 and Rs 1,300 per quintal to Rs 1,220 and Rs 1,320 per quintal, respectively. In addition, farmers have been doled out a Rs five per quintal drought relief bonus.
Officials justified the decision to hike procurement prices, citing drought conditions, which, they say, had impacted production levels.
The Agriculture Ministry has reckoned the 2002-03 wheat crop (to be marketed in 2003-04) at 68.89 million tonnes (mt), as against the previous year's level of 71.81 mt, while production of rapeseed-mustard is slated to fall from 5.04 mt to 4.48 mt. Gram output, too, is estimated to decline from 5.27 mt to 4.40 mt.
``The higher prices will compensate for lower output, thereby protecting the incomes of farmers,'' the officials said, adding that open market prices were also ruling at much higher levels.
Benchmark wheat dara on Thursday quoted at Rs 680-685 per quintal in the Delhi market, with wholesale prices of mustard ruling in the Rs 1,550-1,680 per quintal range.
The Government had earlier announced similar `one-time special drought relief' amounts ranging from Rs 5-20 per quintal for paddy and various other kharif crops currently being marketed across the country.
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