After two consecutive years of significant increase in minimum support price of wheat, Indian farmers might not enjoy the same benefit next year.
According to official sources the commission for agriculture costs and prices (CACP), the nodal agency that determines the MSP for farm goods is learnt to be not keen on recommending a significant hike in wheat MSP for the crop marketing season that starts 2009-10(April-March). Sources said a sharp increase in wheat MSP is unlikely this time because the current MSP for wheat is around 60% more than the average cost of wheat production in the country.
?Though it is too early for determining the MSP for wheat for the next crop season and a final decision rests with the central government, but if one goes by the recommendations of MS Swaminathan committee on agriculture pricing then the current MSP is already much higher than cost of production, negating any need for a sharp spike in wheat MSP,? a senior government official said.
The government raised the MSP of wheat by Rs 150 per quintal to Rs 1,000 per quintal for the 2008-09 marketing season (April-June). In a span of just two years MSP has been raised by a whopping Rs 300 per quintal, which also includes bonuses announced virtually every year.
?The cost of production of wheat is around Rs 620 per quintal, while the MSP is already Rs 1,000, which is more than MS Swaminathan?s recommendation so another significant hike in MSP is unwarranted this time,? the official added. He added that CACP could recommend a increase of less than Rs 100 for wheat in 2009-10. Eminent agriculture scientist MS Swaminathan, who is also the head of national commission for farmers had recommended fixing the MSP of agriculture produce at 50% more than the cost of production to enable farmers to earn more. Sowing for wheat, which is the main food grain grown during the kharif season starts around January, but the government usually declares the MSP around October to enable farmers to take informed decision.