Paddy MSP likely to rise

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New Delhi, Jul 23: Though the economic advisory council headed by Prime Minister Manmohan Singh is yet to give its final decision on raising the minimum support price (MSP) of rice, but official sources said the EAC could settle at an MSP of Rs 900 per quintal for common grade paddy and Rs 950 a quintal for grade ‘A’ paddy.

Last month the government announced an interim MSP of Rs 850 per quintal for paddy and referred the matter to the Prime Minister Economic Advisory Council for a final decision because of disagreement between states. The committee of agricultural costs and prices, the nodal agency that fixes the minimum support price of various commodities, had recommended a MSP of Rs 1,000 per quintal for paddy to bring it at par with wheat.

“The CACP has been in regular touch with EAC officials and have submitted their recommendations to the committee,” a senior government official said, adding that a decision on final paddy MSP could be expected in next few weeks.

The commission is being regularly consulted by the EAC for arriving at a final decision on paddy MSP because of its expertise in setting the price of agriculture commodities.

CACP’s logic in recommending an Rs 1,000 per quintal MSP for paddy was to bring it at par with the MSP of wheat fixed last year.

Already, some states like Tamil Nadu have announced a MSP of Rs 1,000 per quintal for paddy, more than the one fixed by the Centre.

Last year, the government had hiked the MSP of wheat by Rs 150 per quintal to Rs 1,000 per quintal prompting calls from several rice growing states that MSP for paddy should also be raised to give incentive to rice growers as well.

Experts said one big reason for the government’s wheat procurement reaching a record 23 million metric tonnes in 2008-09 was mainly due to sharp increase in the wheat MSP. Last year the MSP of wheat was around Rs 850 perquintal.

The government had deferred taking decision on fixing the MSP of other crops grown during the kharif season arguing that their current market prices were much higher than the CACP recommendations.

Cotton, sugarcane, maize, oilseeds like soyabean, groundnut and sesame are some of the other crops grown during the kharif season apart from paddy.