The Hindu Business Line : Panel recommends Rs 950-980 a quintal as kharif paddy MSP

New Delhi, June 14 The Commission for Agricultural Costs & Prices (CACP) has recommended a Rs 100 a quintal increase in the minimum support price (MSP) of paddy to be cultivated in the current kharif season. It has further proposed a freeze in the MSPs of cotton and soyabean.

“The Commission has suggested fixing the MSP for the 2009-10 crop at Rs 950 a quintal for common paddy and Rs 980 a quintal for Grade A varieties. This is Rs 100 more than the Rs 850-880 MSP range that was fixed for 2008-09”, official sources told Business Line.

Bonus paid last year

But since last year, farmers were also paid a Rs 50 bonus, the effective increase in the procurement price this year (assuming the CACP recommendation is accepted and there is no bonus over and above the MSP) will be only Rs 50 a quintal.

This is much below the hefty hikes in procurement prices in the last couple of years.

The United Progressive Alliance (UPA) Government, in its previous term, had effected an overall Rs 350 a quintal increase between 2003-04 and 2008-09.

The same period also witnessed steep increases in the MSPs for cotton (from Rs 1,725-1,925 to Rs 2,500-3,000 a quintal) and soyabean (from Rs 840-930 to Rs 1,350-1,390 a quintal). “This time, they have sought a freeze in the cotton MSPs at Rs 2,500 for F-414/H-777/J-34 varieties and at Rs 3,000 for H-4 grades.

Likewise, the MSP of black soyabean has been proposed at Rs 1,350 a quintal and at Rs 1,390 for yellow soyabean – the same as for last year”, the sources said.

They added that except for pulses (arhar, moong, urad) and minor oilseeds such as sesamum, “the CACP has not recommended any significant MSP hikes this time”.

Reasons

Part of this has been because of burgeoning public stocks (in the case of paddy/rice) or problems faced by user industries such as cotton textiles and soy-meal exporters in the post-meltdown period.

An equally important reason for going slow on MSP increases has been the possible impact on the inflation front.

Although the official wholesale inflation touched a three decade-low of 0.13 per cent for the week ended May 30, the year-on-year price rise still amounted to 8.6 per cent for ‘food articles’ (including 13.25 per cent in foodgrains and 10.75 per cent in fruits & vegetables) and 12.36 per cent for ‘food products’ (including 31.27 per cent for sugar).

Related Stories:
Rice procurement sluggish in AP on lack of storage facility
Paddy grown in 45,000 acres of fallow land in Kerala