The Cabinet Committee on Economic Affairs (CCEA) is likely to approve tomorrow a proposal to raise the minimum support price (MSP) of wheat by Rs 115 per quintal to Rs 1,400 for the next year starting April 2013.
“The CCEA is scheduled to meet tomorrow. There are two items on the agenda including the MSP of rabi crops,” sources privy to the development said.
As against the recommendation of the Commission for Agricultural Costs and Prices (CACP) which had suggested no hike, the Agriculture Ministry has proposed an increase in the wheat MSP by Rs 115 per quintal to Rs 1,400 for 2013-14 marketing year, as against the Rs 1285 per quintal this year.
The CACP, which advises the government on pricing policy for major farm produce, had recommended freezing of wheat MSP at last year’s level.
Citing reasons for proposing a hike in wheat MSP, the Agriculture Ministry said the price of diesel has been raised by Rs 5 per litre after the CACP submitted its report. Hence, the increase in MSP is required to compensate farmers, sources said.
The ministry also feels that the MSP proposed by CACP are generally lower than those suggested by states. Freezing of wheat MSP proposed by the CACP may not give positive signal to the farming community, sources added.
Besides wheat, the ministry has also recommended increase in MSP of other rabi crops - barley, gram, masur, mustard seed and safflower.
The Agriculture Ministry has recommended raising the support price of gram and masur to Rs 3,200 per quintal each for 2013-14 to reduce the country’s dependence on import of pulses. This year, MSP of gram and masur stood at Rs 2,900 per quintal, respectively.
Similarly, the ministry has suggested increasing the support price of mustard seed to Rs 3,000 per quintal from Rs 2,500 per quintal and safflower to Rs 2,800 per quintal from Rs 2,500 per quintal in the review period.
It has proposed raising the MSP of barley to Rs 1100 per quintal for 2013-14 from Rs 980 per quintal this year, sources added.
Due to better support price and good monsoon, the country had harvested a record 93.90 million tonnes of wheat this year. The Agriculture Ministry hopes to achieve new record production this year as well.