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Our Bureau

New Delhi, Nov. 5 The Centre has fixed the minimum support price (MSP) for the current year’s wheat crop (to be harvested from April next) at Rs 1,100 a quintal.

The Rs 1,100 rate, approved by the Cabinet Committee on Economic Affairs (CCEA) here on Thursday, represents a Rs 20 rise over the MSP of Rs 1,080 a quintal for the 2008-09 crop.

The increase is moderate relative to the Rs 60 to Rs 150 a quintal hikes resorted to in the last few years.

The Rs 1,100 price is also lower than the ruling market price of Rs 1,400 a quintal in Delhi or the more indicative harvest-time April 2010 NCDEX futures quote of Rs 1,296 a quintal.

But still, seen over a longer period, the latest MSP works out Rs 460 a quintal higher than the level prevailing in 2004-05. Compared to this, the period between 2000-01 and 2004-05 saw a meagre Rs 30 increase. Likewise, since 2004-05 (when the Congress-led United Progressive Alliance came to power), paddy procurement prices have gone up by Rs 440 a quintal, against Rs 50 between 2000-01 and 2004-05.

Most of the MSP increases in recent times have come either because of economic compulsions (the need to replenish public stocks in view of spiralling international prices) or political expediency (the need to cultivate farm votes ahead of elections).

“Right now, there is neither. With stocks of 284.57 lakh tonnes (lt) in the Central pool as on October 1 being way above the normative minimum buffer of 110 lt for that date, there is enough wheat available for intervention operations. Also, no major elections are in the offing,” official sources pointed out.

In the case of paddy, the Rs 50 a quintal bonus announced late last month was largely on account of the drought-induced reduction in the kharif crop. This is not the case with wheat, where sowing is just about to begin and the soil moisture regime seems favourable for now.

In fact, the main concern in wheat now is the rather limited supply in the open market. During 2008-09, the country produced a record 805.80 lt wheat crop. But of this, as much as 252.91 lt or over 31 per cent was procured by government agencies, leaving little for the market. That, in turn, had led to wholesale prices hardening by over Rs 300 a quintal in the last three months.

The Agriculture Minister, Mr Sharad Pawar, on Wednesday, said that he was hopeful of the current year’s wheat production going up by 20 lt on the back of an extra five lakh hectares getting planted. “The Rs 20 MSP increase should be sufficient to achieve that objective,” the sources added.

Besides wheat, the CCEA also cleared the MSPs for other rabi crops. The MSPs for rapeseed-mustard and masur (lentil) have been retained at their respective 2008-09 levels of Rs 1,830 and Rs 1,870 a quintal.

The same for chana (gram), safflower and barley have been raised from Rs 1,730 to Rs 1,760 a quintal, Rs 1,650 to Rs 1,680 a quintal, and Rs 680 to Rs 750 a quintal, respectively.

More Stories on : Agriculture | Wheat | Agricultural Policy

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