The Centre on July 3 hiked the minimum support price (MSP) for paddy marginally by Rs 65/quintal to Rs 1,815 for the 2019-20 crop year, while rates for oilseeds, pulses and other cereals were raised substantially.
The decision, taken by the Cabinet headed by Prime Minister Narendra Modi, will help farmers take a call on which kharif (summer) crop to grow at a time when there has been 33 per cent deficiency in southwest monsoon rains in June, although the Met Department has projected good rains for July and August.
Paddy is the main kharif crop, the sowing of which begins with the onset of southwest monsoons. Due to delayed rains, the total area sown to kharif crops was down at 146.61 lakh hectares till last week as against last year's 162.07 lakh hectare, as per government data.
"Monsoon is bit late. It is matter of concern to all and the government is serious about it. The Centre is in constant touch with state governments to deal with deficit rains. But the current estimates of IMD show rainfall will be normal," Agriculture Minister Narendra Singh Tomar said after announcing the MSP of kharif crops for this year.
Tomar said the Centre has increased the MSP of kharif crops for 2019-20 in line with the principle of fixing MSPs at a level which is at least 1.5 times the cost of production, which was announced last year.
The government has raised paddy MSP for both common and A grade varieties by Rs 65/quintal (3.7 per cent) for the 2019-20 crop year (July-June) from over last year, he said. Paddy MSP was increased by Rs 200/quintal for the 2018-19 crop year.
Accordingly, the MSP for paddy (common grade) has been fixed at 1,815/quintal, while that for paddy of A grade variety has been hiked to Rs 1,835 for this year.
The paddy MSP fixed is 50 per cent higher than the cost of production at Rs 1,205/quintal, the minister added.
Among cereals, the government increased ragi MSP substantially by Rs 253 to Rs 3,150 from Rs 2,897/quintal last year.
The MSP of jowar has been raised by Rs 120 to Rs 2,550/quintal for hybrid and Rs 2,570 for Maldandi variety.
Maize MSP has been hiked by Rs 60/quintal to Rs 1,760, while that of bajra has been raised by Rs 50/quintal to Rs 2,000 for the current year.
To encourage production of pulses, Tomar said the MSP of tur has been increased by Rs 125/quintal to Rs 5,800, while that of urad has been raised by Rs 100 to Rs 5,700 and moong by Rs 75 to Rs 7,050.
In order to reduce edible oil imports, the government has increased the MSP of oilseeds crops sharply for this year.
Soyabean (yellow) rate has been hiked by Rs 311/quintal to Rs 3,710 for the current 2019-20 crop year, while that of sunflower seed has been raised by Rs 262 to Rs 5,650, sesamum seed by Rs 236 to Rs 6,485, groundnut by Rs 200 to Rs 5,090 and nigerseed by Rs 63 to Rs 5,940.
Among commercial crops, the government has increased the cotton MSP by Rs 100-105/quintal for this year, with medium staple cotton at Rs 5,255 and long staple cotton at Rs 5,550/quintal.
"The highest percentage return to farmers over their cost of production is for Bajra (85 per cent) followed by urad (64 per cent) and tur (60 per cent)," the government said.
The Agriculture Minister said that assuring minimum of 50 per cent as margin of profit is one of the most important and progressive steps towards doubling farmers' income by 2022 and improving their welfare substantively.
The MSP mechanism provides a price guarantee to the farmers for their produce. This is implemented across the country as nearly 86 per cent farmers are in small and marginal category.
The government said the Food Corporation of India (FCI) and other designated state agencies would continue to provide price support to the farmers in case of cereals, including nutri-cereals. Agencies like NAFED, SFAC and other designated central agencies would continue to undertake procurement of pulses and oilseeds.
Cotton Corporation of India (CCI) will be the central nodal agency for undertaking price support operations for cotton. NAFED would supplement efforts of CCI for cotton procurement.
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