Fixing MSP for kharif crops a challenge for Centre

Tribune News Service

Vibha Sharma

New Delhi, May 24

With rabi crops trading much higher than the minimum support price, the fixing of the MSP for the upcoming kharif marketing season is believed to have become a major challenge for the Centre, eyeing better rice procurement to compensate for lesser wheat in the rabi marketing season.

Higher price likely this time

• The CACP recommends MSPs of crops to govt on basis of a formula that includes costs directly incurred by farmers on seed, fertiliser, pesticide, fuel, irrigation, labour and land lease
• Given a substantial increase in input costs, a higher-than-usual MSP of grains, including paddy, is being predicted this year, which will be good for farmers
• However, higher MSPs will not only increase the Centre’s procurement costs for welfare programmes, they will influence the market, availability and selling patterns

Based on a positive outlook in the agriculture commodities’ market, experts are predicting a higher-than-normal acreage of kharif crops this year, provided weather conditions remain conducive. Though higher acreage and higher production are expected to provide relief to consumers and policymakers struggling due to sky-rocketing inflation, sources indicate certain predicament over the fixing of the base price for the year.

Notably, the Commission for Agricultural Costs and Prices (CACP) recommends MSPs of various crops to the government on the basis of a formula which includes costs directly incurred by farmers on seed, fertiliser, pesticide, fuel, irrigation, labour and land lease. Given a substantial increase in input costs, a higher-than-usual MSP of grains, including paddy, is being predicted this year, which will be good for farmers. However, higher MSPs will not only increase the Centre’s procurement costs for welfare programmes, they will influence the market, availability and selling patterns.

“The government has to look after the interests of both farmers and consumers,” say officials. After a decrease in wheat procurement in rabi season, the Centre reduced wheat allocation to several states and UTs under the Pradhan Mantri Garib Kalyan Anna Yojana which is being compensated with rice to keep the overall figure intact. The government will also have to procure extra rice to continue the free foodgrain distribution scheme beyond September.

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