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Cabinet approves across-the-board hike in support prices for kharif crops

01 June 2016

The union cabinet has approved higher bonus payments for pulses, sesamum and oilseed in addition to increased minimum support price (MSP) for all kharif crops, although the government is hopeful of higher agriculture production in 2016-17 on account of good monsoon predicted by the weather bureau.

Accordingly, the MSP for tur (arhar) has been increased by 9.2 per cent to Rs5,050 (including bonus of Rs425) from Rs4,625 (including bonus of Rs200).

MSP for urad was increased by 8.1 per cent to Rs5,000 (including bonus of Rs425) from Rs4,625 (including bonus of Rs200).

MSP for moong was raised 7.7 per cent to Rs5,225 (including bonus of Rs425) from Rs4,850 (which included bonus of Rs200).

Besides, "a bonus of Rs425 per quintal will be paid for dalhan (pulses), Rs100 for tilhan (oilseed) and Rs200 for teel (sesamum)," will be paid to the farmer, agriculture minister Radha Mohan Singh said after the cabinet meeting.

The MSP for paddy was increased 4.3 per cent to Rs1,470 per quintal for the common variety and 4.1 per cent to Rs1,510 per quintal for the `Grade A' variety.

Jowar, bajra, maize and ragi, too, will get higher MSPs ranging between 3.5 per cent and 4.5 per cent, as per the cabinet's decision.

Sesamum will get a 6.4 per cent higher MSP of Rs5,000 per quintal (including Rs200 bonus).

For oilseeds, the MSP for soyabean was raised the most by 6.7 per cent to Rs2,775 per quintal (including Rs.100 bonus). MSP was increased 4.8 per cent to Rs3825 (including Rs100 bonus) for nigerseed, by 4.7 per cent to Rs4,220 (including Rs100 bonus) for groundnut and by 3.9 per cent to Rs3,950 (including Rs200 bonus) for sunflower seed.

For cotton, the MSP has been increased by 1.6 per cent to Rs3,860 for medium staple and 1.5 per cent to Rs4,160 for long staple.

The decision to increase MSPs is based on the  recommendations of Commission for Agricultural Costs and Prices (CACP), which takes into account the cost of production, overall demand-supply, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect of the price policy on the rest of economy, besides ensuring rational utilisation of productive resources like land and water, while recommending MSPs.

The CACP being the expert body, its recommendations are generally accepted as such. However, to incentivise cultivation of pulses and oilseeds, the cabinet has decided to give a bonus, over and above the recommendations of the CACP, of Rs425 per quintal for kharif pulses, namely arhar (tur), urad and moong, a bonus of Rs200 per quintal for sesamum and a bonus of Rs100 per quintal for other kharif oilseeds, namely, groundnut-in-shell, sunflowerseed, soyabean, and nigerseed.

There is an increasing gap between demand and domestic supply of pulses and oilseeds and reliance on import is increasing.

The government has, therefore, announced this bonus on pulses and oilseeds to give a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops.

The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.

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