The Commission for Agricultural Costs and Prices (CACP) has recommended that the government raise the minimum support prices (MSPs) of most kharif crops by around five per cent or lower. The CACP has sought a hike of 9.09 per cent to Rs 5,700 a quintal for moong and 3.96 per cent to Rs 5,250 a quintal for tur.
The recommendation on pulses, particularly on tur, has considered the current market prices as well as its possible inflationary impact and has been kept at a reasonable level so that farmers maintain the crop area at the previous level, the sources said. The wholesale price index (WPI) inflation rose more sharply than expected in February, hitting a 39-month high, which also influenced the Monetary Policy Committee (MPC) as it did not change the interest rate for next two months.
The government normally accepts the MSP recommendations of the commission. There have been, however, a few occasions when prices were fixed at higher levels in certain crops to encourage farmers increase the sowing areas. The MSPs fixed by the government become benchmark prices in the market as farmers refuse to sell below that level unless they need immediate cash.
The commission has asked the government to raise the common variety of paddy, the main kharif cereal, by 5.44 per cent to Rs 1,550 per quintal and the ‘grade A’ variety 5.29 per cent to Rs 1,590 a quintal for 2017-18 season, sources said. Since 67 kg rice is produced from 100 kg of paddy after processing, the effective price in terms of common variety rice will be Rs 2,313 a quintal.
The CACP, which recommends MSPs of 23 commodities, has submitted its price policy report for kharif crops 2017-18 early this week, sources said. The agriculture ministry will seek the cabinet approval before sowing starts from June as farmers get the price signal to plan their crop areas based on MSPs. The ministry will soon start consulting states and other ministries to prepare the cabinet note, the sources added.
According to the recommendations, the MSP of maize should be raised by 4.39 per cent to Rs 1,425 a quintal and cotton by 4.14 per cent at Rs 4,020 a quintal. The CACP has asked the government not to raise the MSP of groundnut as the market prices are higher and export has also been allowed. It suggested 2.70 per cent increase to Rs 2,850 a quintal for soybean.
prabhudatta.m
@mydigitalfc.com
