Published: Thu, July 05, 2018
Markets | By Otis Pena

MSP Hiked for Kharif Crops But Still It's Short of Cost +50%

MSP Hiked for Kharif Crops But Still It's Short of Cost +50%

Paddy, the main kharif crop, will see an increase of Rs. 200, a 13% hike on last year's MSP. He thanked the prime minister for fulfilling the promise of giving farmers a minimum support price 1.5 times higher than the production cost.

The highest increase in the MSP has been for Bajra which will now fetch Rs 1950 per quintal against Rs 1425 last Kharif season.

The Indian Express had reported that the previous best hike for MSP for paddy was Rs 155 per quintal in 2008-2009, in the election year of the first tenure of the UPA. While Modi's critics say the hike in price is too little and too late, economists and agriculturalists believe it is just a short-term solution to woo the farmers. Briefing about the CCEA decision, Home Minister Rajnath Singh said the Cabinet has approved the MSP of 14 kharif (summer-sown) crops for the 2018-19 season.

"This will send a positive message to farmers and boost their confidence and end farm distress", Singh said.

The below-MSP rates, however, are as much as 30 percent higher than global prices for some commodities like pulses, making exports uncompetitive, Galipelli added. "We have controlled inflation in last four years and will succeed in controlling it in future as well as".

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The support price of moong, another pulse, has been hiked to Rs 6,975 per quintal from Rs 5,575. Urad MSP has been hiked to Rs 5,600 from Rs 5,400 per quintal, which constitutes a 62% increase over input costs of Rs 3438 per quintal. However, CoP according to C2 formula was Rs 2,089 per quintal in 2017-18 and so the MSP should have been Rs 3,113.5 per quintal.

Exclusion of rental value or interest on the value of owned capital assets in calculating MSP is direct discrimination on the part of small, marginal and tenant farmers who constitute to more than 86 per cent of total farmers in the country. The MSP of jowar (hybrid) has been raised by Rs 730 per quintal to Rs 2,340 for this year, while that of Maldani variety by Rs 725 per quintal to Rs 2,450, the government said. "We tolerated a number of political allegations, we accepted political damage but ensured no damage to our country", he said, adding India is now the fastest growing large economy with strong fundamentals to propel further growth. Reports suggest that the Centre may have to bear Rs 12,000-15,000 crore annually to compensate farmers in case prices fall below the MSP in all crops except rice and wheat which are already being procured by state-run Food Corporation of India.

He also asserted that his government will continue to take steps for the welfare of the farming community.

The government was regularly attacked by farmer associations and the opposition for making "hollow promises" about doubling their income by 2022.

Prime Minister, Narendra Modi rubbished the claims of lack of jobs in the country and mentioned more than lack of jobs the upsetting issue is lack of data of jobs. "But unlike them, our initiatives do not stay limited to the files, but enter the field", he said, citing crop insurance schemes, higher minimum support price, soil health card and neem-coated urea as the cornerstone of his government's rural focus.

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