The Union Cabinet on June 1 approved the minimum support price for 14 kharif crops.
The MSP for paddy has been raised by Rs 53 per to Rs 1,868 per quintal for the 2020-21 crop year, Union Agriculture Minister Narendra Singh Tomar said in a cabinet briefing.
The revised prices will provide farmers nearly 50-83 percent more than the cost, Tomar said. Among other produce, the MSP for Cotton has been increased by 50 percent or Rs 260 to Rs 5,515 per quintal, he said.
The MSP for ragi, moong and groundnut have also been raised by 50 percent.
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On May 15, Finance Minister Nirmala Sitharaman had announced that decades-old monopolies of state-run Agriculture Produce Market Committees (APMCs), often blamed for unfair trading, would be dismantled, amendment of the Essential Commodities Act (ECA) and frame an indicative price signalling system that a farmer can rely on at the time of sowing.
"The government has decided to give farmers the right to decide where and at what price he would sell his produce. The central Act will be brought and the process for that is ongoing and will take full shape in few days," Tomar said.
APMCs, over the years, had become barriers for farmers to get a fair price for their produce as they were forced to sell it through these committees. APMC regulations require farmers to only sell to licensed middlemen in notified markets, usually in the same area where farmers reside, rather than in an open market.
The ECA will also be amended to eliminate punitive measures such as preventive detention, confiscation of vehicles and attachment of properties of suspected hoarders and black marketeers.
Under existing rules, the ECA limits quantities traders can buy from farmers and hold as stock. If a trader cannot buy or hold sufficient quantities of grains for a certain profit margin, he or she would not buy out surpluses that farmers may have to sell. This has been identified as one of the reasons why farm incomes have taken a hit.
Tomar said the procurement of wheat and paddy has gone up despite concerns due to lockdown.
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He noted that 360 lakh metric tonnes of wheat have been procured this year versus 342 lakh metric tonnes last year. In the case of paddy, procurement has been at 95 lakh metric tonnes versus 90 lakh metric tonne last year.
Among other measures to help farmers, the government has extended time for repayment of loans to August now, he said.
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