Govt may hike wheat MSP to Rs 1,080/qntl

Written by Commodities Bureau | Agencies | New Delhi, Oct 17 | Updated: Oct 18 2008, 08:01am hrs
The Centre may hike the minimum support price of wheat to Rs 1,080 per quintal for next marketing season beginning April 2009. The minimum support price (MSP) for all rabi crops including wheat would be decided by Cabinet and a decision is expected early next month, a senior government official has said.

The Commission on Agricultural Costs and Prices (CACP), the nodal agency that fixes the MSP of various commodities, recommended wheat MSP be increased by Rs 80 to Rs 1,080 a quintal, which in all likelihood might be accepted as the hike was decent, he said.

Unless there was a controversy, the recommendations of CACP were normally accepted by the government, he added.

Among the rabi crops, mustard and chana are two other major crops for which farmers wait for the MSP announcement before taking a decision on sowing.

As wheat sowing will begin from November, if the government announces the hike around that period it will help the country to increase the areas under the crop, he said.

The agriculture ministry is targeting to increase the area under wheat by one million hectare this year from 281.5 lakh hectare in 2007-08. The production target is fixed at 785 lakh tonne compared with an output of 784 lakh tonne recorded last year.

The official pointed out that for the kharif crops, the government accepted all recommendations of CACP except in paddy. In June, the government announced an interim MSP of Rs 850 per quintal for common grade paddy and Rs 880 per quintal for grade 'A" paddy. However, it referred the matter to the Prime Minister's Economic Advisory Council (EAC) for a final decision because of disagreement between states.

The EAC opined that MSP should be maintained at Rs 850 per quintal for the time being and an additional bonus be announced when the government starts its annual paddy procurement. The committee of agricultural costs and prices (CACP), 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.

CACP's logic in recommending an Rs 1,000/quintal MSP for paddy was to bring it at par with the MSP of wheat fixed last year. However, the government on Thursday announced a bonus of Rs 50 a quintal over the MSP to increase the rice procurement.