MSP for paddy hiked less than 4% to ₹1,940 per quintal: Cabinet decision

There were slightly higher increases in the MSPs for pulses, oilseeds and coarse cereals

The Centre has hiked the minimum support price for common paddy to ₹1,940 per quintal for the upcoming kharif season, less than 4% higher than last year’s price of ₹1,868. The decision was taken by the Cabinet Committee on Economic Affairs on Wednesday.

There were slightly higher increases in the MSPs for pulses, oilseeds and coarse cereals. Tur and urad dal both saw MSPs rise by ₹300, a 5% increase to ₹6,300 per quintal, while the highest absolute increase was for sesamum, whose MSP rose 6.6% to ₹7,307 per quintal. Groundnut and nigerseed saw increases of ₹275 and ₹235 per quintal respectively. However, maize saw a minimal hike of just ₹20 to ₹1,870 per quintal.

The announcement comes in the midst of a protest by farmers demanding that MSPs be given a legal guarantee, and also demanding a repeal of three contentious agricultural reform laws. Briefing the press after the Cabinet meeting, Agriculture Minister Narendra Singh Tomar reiterated that MSPs are here to stay, adding that the Centre is ready for talks with protesting farmers. Earlier, he told journalists that the Centre was prepared to hold talks about any options other than the repeal of the three laws.

The MSP is the rate at which the government purchases crops from farmers, and is based on a calculation of at least one and a half times the cost of production incurred by farmers. This year, the MSP for bajra was set at 85% above the cost of production, and the urad and tur MSPs were more than 60% above the cost of production. MSPs for the remaining crops were mostly set around the stipulated 50% above the cost of production.

“The differential remuneration is aimed at encouraging crop diversification,” according to an official statement. “Concerted efforts were made over the last few years to realign the MSPs in favour of oilseeds, pulses and coarse cereals to encourage farmers shift to larger area under these crops and adopt best technologies and farm practices, to correct demand – supply imbalance. The added focus on nutri-rich nutri-cereals is to incentivize its production in the areas where rice-wheat cannot be grown without long term adverse implications for groundwater table,” it added.

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