Financial Daily from THE HINDU group of publications
Friday, Sep 30, 2005
Financial Daily from THE HINDU group of publications Friday, Sep 30, 2005 |
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Agri-Biz & Commodities
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Agricultural Policy MSP for rabi crops hiked by Rs 10-15/quintal — Trade dubs it political move; Nafed nodal agency for procurement Our Bureau
New Delhi , Sept. 29 THE Government has increased the minimum support price (MSP) of wheat, barley, gram and masur by Rs 10 a quintal for average quality rabi crops of 2005-06 to be marketed in 2006-07. The MSP for wheat has been fixed at Rs 650, whereas that for barley has been fixed at Rs 550. "The Cabinet Committee on Economic Affairs today approved the MSP of fair average quality rabi crops of 2005-06 to be marketed in 2006-07," the Finance Minister, Mr P. Chidambaram, told newspersons. The MSP for both gram and masur (lentil) has been fixed at Rs 1,435 and Rs 1,535 respectively. Meanwhile, the MSP for oilseeds has been raised by Rs 15 a quintal. The new support price for rapeseed/mustard and safflower would be Rs 1,715 and Rs 1,565 a quintal, respectively for the next marketing season. The prices of other oilseeds belonging to the mustard group would be fixed on the basis of their normal market price differentials with mustard. The National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) will continue to be the nodal agency for procurement of oilseeds and pulses and losses, if any, would be fully reimbursed by the Government. All the MSPs for various crops have been recommended by the Commission for Agricultural Costs and Prices (CACP). Increase `unwarranted': On the Rs 10 increase in MSP of wheat, the All India Grain Exporters' Association President, Mr D.P. Singh, said the move was "political in nature and does not make economic sense''. By adding to the grain prices without increasing productivity, the Government was encouraging chances of import in case of a shortage and making Indian wheat highly uneconomical in the international market, he told Business Line. Instead of increasing the MSP every year to please the farmer, the Government should rather focus on increasing the productivity, bringing down the cost of production and consolidation. Increase in MSP would result in increasing the subsidy bill, he said.
Earlier, on two occasions, the Government had resorted to increasing MSP even if there were no recommendations from the CACP, Dr Singh added.
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