According to highly-placed sources in the commodity board, the board has recommended a minimum increase of 5 per cent in MSP for both milling and edible copra for the 1999-2000 season. Last year, the board had recommended no change in MSP for copra in view of the stagnation in the cost of coconut cultivation.

According to the fresh recommendations, the board has suggested an MSP of Rs 4,100 per quintal for milling copra and Rs 4,400 per quintal for edible ball copra for the season 2000.

The board will submit its recommendations to the visiting delegation of Commission for Agricultural Cost and Prices chaired by noted economist Abhijit Sen on October 10. The commission will visit Kerala from October second week to collect the necessary information forfixing the new MSP for copra. Besides the officials of the Coconut Board, the commission would also meet officials of the state government and other parties concerned.

The board in its recommendations had suggested that during the 1999 season, the market price for copra ruled much higher compared to MSP announced rendering the market intervention mechanism redundant. The board last year had recommended an MSP of Rs 3,900 per quintal for milling copra and Rs 4,200 per quintal for ball edible copra. However, the government declared Rs 3,100 and Rs 3,325 respectively. The ruling price for milling copra was Rs 3,377 per quintal and Rs 4,000 per quintal for ball copra.

"MSP is only a checkline assured by the government in order to arrest drastic crash in prices below the benchmark level. It can only be considered as a supporting line to help regulate the price mechanism," sources said.

Sources said that the board has pegged the hike in MSP at 5 per cent level in view of the estimated increase in cost ofproduction. "The cost of labour is one of the important factors which affects the cost of cultivation. In Kerala, the labour cost is between Rs 100-150 per man day while it is around Rs 50-70 in other states. The cost of production has also increased marginally as the cost of both organic and inorganic fertlisers have also gone up. The recent pest attack in some major producing areas has also pushed up the production cost", the source said.

Taking these factors into consideration, the Board feels that a minimum 5 per cent hike in MSP is necessary, sources added.