CACP submits MSP proposals for six rabi crops

The commission for agriculture costs and prices (CACP) has submitted to the government its recommendations on the minimum support price of six crops grown during the coming rabi season.

According to official sources, the largest hike in MSP has been suggested for chana (chikpeas), while the lowest has been for wheat, the largest-grown foodgrain during the rabi season.

As reported by FE, the commission is not keen on recommending a significant hike in wheat MSP this year because the current MSP for wheat is around 60% more than the average cost of wheat production in the country.

?Moreover, this year our granaries are brimming with wheat, so CACP argued that a nominal hike in wheat MSP for next year is sufficient to sustain the current growth in wheat production,? sources said, adding that the commission has recommended hiking wheat MSP by around Rs 50 to Rs 100 per quintal.

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.

Sources said CACP argued that as 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.

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 rabi season starts around January, but the government usually declares the MSP around October to enable farmers to take informed decision.

A big reason for this year’s sharp increase in area under wheat and the all-time high production of over 78 million tonne is the early announcement of MSP and a substantial increase in that.

Sources said this time around, MSP for other rabi grown crops is also not expected to be much higher than last year.

During the ongoing kharif sowing season, the government had hiked the minimum support price of paddy, the main foodgrain grown during the kharif season to around Rs 850 per quintal, lower than the CACPs recommendations of Rs 1,000 per quintal. It also kept MSP’s of other agriculture commodities unchanged, as their open market price was much higher than the CACP’s recommendations.