NEW DELHI: In the earliest announcement of minimum support price (MSP) for rabi crops in recent years, the Cabinet on Wednesday approved support prices of six crops with the highest percentage hike (8.6%) to mustard and rapeseeds and lowest to wheat (2%) for the marketing season beginning April 1 next year.
The underlying message in the MSP hikes is to encourage farmers to opt for crop diversification and boost production of oil seeds. The early announcement is also seen as an attempt to send a positive signal to farm unions in Punjab, Haryana and western UP agitating over farms laws interpreted by them as intended to eventually end the MSP regime.
The increase for wheat, though small, takes the MSP to Rs 2,015 a quintal and reflects the overall higher support that the cereal, along with rice, has received under the procurement system. Though all six rabi crops have got an MSP hike compared to previous year, an analysis of increase in cost of production, however, shows negative returns in the case of wheat and barley in absolute terms.
The estimated increase in cost of production of both wheat and barley is Rs 48 per quintal each over previous year, but the MSP hike is Rs 40 per quintal and Rs 35 per quintal, respectively, for the 2022-23 rabi marketing season. At the same time, the returns over cost of production would be 100% for wheat and 60% for barley.
The highest hike to mustard and rapeseed is, on the other hand, in sync with the government’s increasing focus on oilseeds in order to reduce the country’s dependence on imports. Similarly, a good hike in MSP of lentils (masur) too reflects the priority on pulses, the price rise of which invariably causes heartburn among consumers.
The MSP announcement gives a signal to farmers ahead of the sowing season so that they can make the right choice of crops and opt for diversification in advance. The higher MSP and procurement have also been quoted by the government as evidence of the Centre’s commitment towards both along with higher investments in mandis.
“All those who have been propagating misleading information must take a message from the announcement. The rate of MSP and procurement of crops at support prices are increasing continuously after the enactment of the farm laws,” agriculture minister Narendra Singh Tomar said.
He also flagged Prime Minister Narendra Modi’s assurance on the issue, saying MSP is very much there and would continue. “There should not be any doubt about the fate of MSP in anyone’s mind,” said Tomar.
Past records show that the Centre has never made an announcement of MSP for rabi crops as early as in first half of September when even sowing operations of kharif (summer-sown) crops continue in certain regions.
Except for last year, when it was announced a day after the passing of the contentious farm bills in Parliament on September 21, the announcement is either made in October or later in November or December. Once it was announced as late as almost the end of the rabi sowing season on January 29 in 2009 during UPA-I.