The unprecedented hike in minimum support price (MSP) for wheat to 33% is likely to boost investment in agriculture. The wheat growing regions especially Punjab and Haryana are expected to benefit the most.
The remuneration has unleashed zeal among the wheat growers who may increase their expenditure on fertilisers, pesticides, seeds and irrigation in order to increase the yield this season.
The announcement of enhanced procurement price has been has made the farmers in the two states happy. Farmers across Punjab and Haryana are the mainstay of the public distribution system ( PDS). With over 85% of agricultural land in Rabi season under wheat the PDS may soar this fiscal. “Majority of wheat growers in other states priced it at Rs 1,000 per quintal during the last harvest in the open market,” an expert said.
Motivated by the new procurement price (Rs 1,000 per quintal), farmers are believed to push for higher yield and better quality especially in states of Punjab and Haryana. “So far quality of wheat has not been the top priority for farmers especially marginal and small ones in the two states due to declining margins and lack of resources to generate capital. The added fiscal incentive would encourage farmers to invest more on seeds, fertilizer, irrigation to fetch higher price in open market,” a wheat grower from Punjab told FE.
“The hike announced by government would definitely act as catalyst for agricultural investment that has been dwindling the last five years due to depleting margins for farmers” PS Rangi, consultant, Punjab Farmers Commission said.
Meanwhile, the demand for increase in MSP for Paddy is growing stronger by the day across the two states. “The MSP for Paddy needs to be increased to Rs 918 as per the whole sale index to benefit paddy growers at par with the wheat growers,” Ajmer Singh Lakhowal, chairman, Punjab Mandi Board said.