Bothered by soaring inflation, which has threatened to cross 12% in the coming weeks, the Economic Advisory Council, headed by Prime Minister Manmohan Singh, is believed to have recommended a staus quo on the minimum support price of paddy. The government had earlier announced a interim paddy MSP of Rs 850/quintal and referred the issue to EAC for a final decision.

According to sources, the EAC has opined that the MSP could be raised to around Rs 1,000 per quintal around late September, when the government starts its annual paddy procurement. In India, the central government starts its rice procurement from farmers from October 1.

Earlier, EAC officials were veering towards an MSP of Rs 950 per quintal for grade ?A? paddy and Rs 900 per quintal for common grade paddy. Last month the government announced an interim MSP of Rs 850 per quintal for paddy and referred the matter to the Prime Minister Economic Advisory Council for a final decision because of disagreement between states. The committee of agricultural costs and prices, 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. Already, some states like Tamil Nadu have announced a MSP of Rs 1,000 per quintal for paddy, more than the one fixed by the Centre.

Last year, the government hiked the MSP of wheat by Rs 150 per quintal to Rs 1,000/ quintal prompting calls from several rice growing states that MSP for paddy should also be raised to give incentive to rice growers as well.

Experts say one big reason for the government?s wheat procurement reaching a record 23 million metric tonne in 2008-09 was mainly due to sharp increase in the wheat MSP. Last year the minimum support price of wheat was around Rs 850/quintal.

The government had deferred taking decision on fixing the MSP of other crops grown during the kharif season arguing that their current market prices were much higher than the CACP recommendations.

Cotton, sugarcane, maize, oilseeds like soyabean, groundnut and sesame are some of the other crops grown during the kharif season apart from paddy.

The CACP had in its other recommendations had suggested hiking the MSP of maize to Rs 840 per quintal, up from the current MSP of Rs 620 per quintal. The MSP for arhar (pigeon pea) was proposed at Rs 2,000 per quintal, up from Rs 1,590 per quintal.

The MSP for urad (black gram) was recommended at Rs 2,520 per quintal. For soybean, the largest grown oilseeds in the kharif-cropping season, the MSP for black and yellow varieties the recommendation was for raising the MSP to Rs 1,350 per quintal.