The government may announce generous 5-10% increases in minimum support price (MSP) of kharif crops – paddy, pulses, oilseeds and coarse cereals for 2024-25 season (June-July) to incentivise farmers to boost output.

Sources told FE the MSP for pulses varieties like tur and urad is expected to see a hike of 8- 10%, while MSP for moong dal which was the highest amongst the pulses variety in previous season, is likely to witness a moderate increase.

Officials said that because of slower increase in production against the demand, the prices of tur and urad are ruling far above the MSP while the country has been importing substantial quantities of pulses varieties.

“In addition many farmers in Maharashtra have shifted to soybean because of higher yield and remunerative returns compared to growing tur dal,” an official said. Sources said that last three years average soybean yield in Maharashtra was 12 quintal/hectare against only 7-8 quintal/hectare for tur dal.

The MSP for soyabean which was Rs 4600/quintal last season (2023-24), an increse of 7% on year, also likely to be increased significantly to boost output.

The officials said currently pulses output is concentrated in 50 odd districts in the country and higher MSP would encourage farmers in non-growing districts to cultivate pulses.

Sources also said increase in paddy MSP for the next kharif season is likely to be moderate around 5% on year against an increase of 7% to Rs 2183/quintal was announced for 2023-24 season.

Officials said with a huge surplus of rice stocks at the central pool, the government is aiming to give a signal to farmers to diversify to more remunerative pulses and oilseeds especially in Punjab and Haryana.

Rice stocks at the central pool as on June 1 was 31.98 MT. Effectively, FCI holds 50.08 million tonne (MT) — including 18.12 MT of grain receivable from millers, four times above the buffer of 13.54 MT for July 1.

“Concerted efforts have been made over the last few years to realign the MSP in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift larger areas under these crops and correct demand and supply imbalance,” an official said.

India imports about 55-56% of its total domestic requirement of edible oil while 15% of pulses consumption is met through imports.

Sources said that the Commission for Agricultural Costs and Prices (CACP) has already submitted its recommendation for hike in MSP of kharif crops to agriculture ministry and the decision to hike remunerative prices for 2024-25 kharif season would be taken up by the cabinet committee on economic affairs (CCEA) soon after the new government is sworn in.

Sowing of kharif crops would commence shortly with the progress of southwest monsoon and a hike in MSP would provide remunerative prices to the farmers while encouraging them to opt for crop diversification.

“Keeping in view the import dependency in oilseeds, more thrust should be given to enhance oilseed production in the country through improvement in yield along-with area expansion so that country can attain self-sufficiency in oilseed production,” the CACP’s report on price policy for kharif crops of 2022-23 season said.