Govt may increase MSP for rabi crops by 10%

By: |
Published: September 10, 2016 6:03:30 AM

Likely to give bonus of up to Rs 425 per quintal on pulses

the government is likely to announce 5 to 10% hike in minimum support price (MSP) for the rabi crops, including wheat, barley, gram, masur and mustard, for the 2016-17 season besides a bonus on pulses in the range of Rs 250 to Rs 425 per quintal. (Reuters)the government is likely to announce 5 to 10% hike in minimum support price (MSP) for the rabi crops, including wheat, barley, gram, masur and mustard, for the 2016-17 season besides a bonus on pulses in the range of Rs 250 to Rs 425 per quintal. (Reuters)

In a bid to boost production of pulses and oilseeds, the government is likely to announce 5 to 10% hike in minimum support price (MSP) for the rabi crops, including wheat, barley, gram, masur and mustard, for the 2016-17 season besides a bonus on pulses in the range of Rs 250 to Rs 425 per quintal.

Sources told FE that the Cabinet Committee on Economic Affairs (CCEA) is likely to take up the issue of increasing rabi MSPs shortly. In order to bridge the gap between demand and supply, the government has been increasing MSP of especially pulses and oilseeds steadily besides announcing additional bonus which encourages farmers to increase output.

The sowing of rabi crops usually commences in November and December after the harvest of kharif crops — paddy, pulses, oilseeds, sugarcane and cotton.

Meanwhile, the agriculture ministry has called a conference of officials from states to chalk out strategy for rabi crops next week.

In June, the CCEA had approved a hike in MSP of tur or arhar by 9.2% to Rs 5,050 per quintal for the kharif season, which includes a special bonus of Rs 425 per quintal. Similarly, for other pulses like moong and urad, the MSPs were increased by more than 7% to Rs 5,225 per quintal and by more than 8% to Rs 500 per quintal, respectively. This also includes a bonus of Rs 425 per quintal for both the pulses.

According to data released on Friday by the agriculture ministry, the kharif crops sowing so far has surpassed last year’s sowing by more than 4%. With the exception of sowing of cotton and sugarcane which are down by 11% and 8% respectively, all the key kharif crops’ cultivation has exceeded last year’s figure.

The pulses have been sown in close to 30% more areas compared to the previous year. Kharif pulses usually are sown in 108 lakh hectare while this year mainly because of adequate monsoon rains and spike in prices in last couple of months has resulted in farmers sowing pulses in 144 lakh hectare so far.

The agriculture ministry has set the country’s grain production target at a record 270.10 million tonne (MT) for the 2016-17 crop year (July-June), up 6.7% from the actual grain production of 253.23 MT in 2015-16.

MSP is the rate at which government agencies like Food Corporation of India (FCI) and other state government-owned agencies procure grain from farmers. Besides it is also taken as benchmark prices in the market. Despite the hype surrounding MSP figures announced each year, only a tiny section of Indian farmers benefit from the price-support mechanism. According to a high-level committee report, just 6% of farmers sell their produce to state-run procurement agencies.

Get live Stock Prices from BSE and NSE and latest NAV, portfolio of Mutual Funds, calculate your tax by Income Tax Calculator, know market’s Top Gainers, Top Losers & Best Equity Funds. Like us on Facebook and follow us on Twitter.

Next Stories
1Gold, silver weaken on global cues
2Gold extends losses, down Rs 150 on global cues
3Oil pulls back after big jump on US crude stock draw