The Cabinet Committee on Economic Affairs deferred a decision on a hike in the minimum support prices (MSP) for wheat following inter-ministerial differences.
However, it approved an increase of up to 20 per cent in support prices for rabi oilseeds and pulses.
Sources said that the Agriculture Ministry is in favour of a hike in wheat MSP but the Finance Ministry was opposed to it as increase in support price could fuel further price rise and inflate the food subsidy bill.
As a result, the support price for wheat for 2013-14 marketing season stays at last year’s level of Rs 1,285 a quintal, as of now.
However, it may be revised after further consultations, for which Agriculture Ministry is likely to move a Cabinet note.
For rapeseed/mustard, the key winter oilseed crop, the MSP has been hiked by Rs 500 to Rs 3,000 per quintal.
The MSP for safflower is fixed at Rs 2800 a quintal for 2013-14, an increase of Rs 300 over last year’s Rs 2500 a quintal. The CCEA also left the support price for barley unchanged at Rs 980 a quintal.
MSP for gram and masur, the main pulses grown in winter, has been hiked to Rs 3,000 and Rs 2,900 a quintal each for the marketing year 2013-14 starting April. In 2012-13, the MSP for these two pulses stood at Rs 2,800 a quintal each.
The hike in MSP is broadly in line with the recommendations of the Commission for Agricultural Costs and Prices (CACP), which suggested raising support prices for pulses and oilseeds.
Such a move was to encourage farmers to grow more of these crops so that the country’s import dependence on pulses and oilseeds is reduced.
The annual edible oil import bill now exceeds Rs 55,000 crore while that of pulses is over Rs 10,000 crore. India imported about 10 million tonnes of edible oil for the oil year-ended October 2012, up 18 per cent over the previous year.
Considering the huge wheat stocks, estimated at 43 million tonnes as of October 1, the CACP had recommended a freeze on support price for wheat in the 2013-14 marketing season at last year’s level.
However, the Agriculture Ministry was in favour of a marginal increase MSP for wheat at Rs 115 per quintal to Rs 1,400 a quintal.