Cabinet approves proposal to raise minimum support price for Kharif crops

Rice paddy field in rural Karnataka, India.

Less than a year ahead of the 2019 General Elections, the Union Cabinet today approved the proposal to hike minimum support price (MSP) for all Kharif crops by 1.5 times of the input cost for the 2018-19 season, a move that is expected to boost farmers’ income.

MSP is a price at which the government buys crops from the farmers, irrespective of its price, to protect agriculture producers from sharp fall in farm prices.

The move is in line with the announcement made by Finance Minister Arun Jaitley in Budget 2018 of MSP 1.5 times the cost of production for the crops. The increased MSP is also seen as a step towards meeting the Prime Minister Narendra Modi’s promise to double farmer’s income by 2022.

Home Minister Rajnath Singh told the reporters that the impact of higher MSP will not be inflationary. While the government is concerned about inflation, MSP is not the only trigger for a rise in the general price level in the economy, he said.

The MSP of Niger seeds has been proposed to increase at Rs 1,827 per quintal, Moong by Rs 1,400 per quintal, Sunflower Seed by Rs 1,288 per quintal and Cotton by Rs 1,130 per quintal.

Among cereals and nutria-cereals, in terms of absolute increase, MSP of paddy (common) has been raised by Rs 200 per quintal, Jowar (hybrid) by Rs 730 per quintal and Ragi by Rs 997 per quintal.

“The highest percentage increase in MSP over the previous year is for Ragi (52.47 percent) followed by Jowar hybrid (42.94 percent). For pulses, apart from Moong, MSP of Arhar has been raised by Rs 225 per quintal yielding a return over cost by 65.36 percent and Urad by Rs 200 per quintal with a return over cost by 62.89 per cent in order to maintain inter-crop-price parity. Similarly, the MSP of Bajra has been raised by Rs 525 per quintal yielding a return of 96.97 percent over cost,” the government said in a release.