Govt likely to hike paddy MSP by 160 to 1,160/qtl

Govt likely to hike paddy MSP by 160 to 1,160/qtl

New Delhi: The government is likely to increase the support price for paddy soon by 160 to 1,160 per quintal for the 2011-12 crop year as it wants to encourage farmers to produce more to meet higher demand under the proposed National Food Security Act.

According to official sources, the Agriculture Ministry has proposed a 160 hike in the minimum support price (MSP) for paddy (common variety) to 1,160/quintal for the 2011-12 crop year (July-June), against 1,000 a quintal in 2010-11.

The proposal to increase the MSP of rabi crops is likely to be placed before the Cabinet Committee on Economic Affairs (CCEA) next week, sources said.

The Agriculture Ministry’s proposal is in line with the recommendation of the Commission for Agricultural Costs and Prices (CACP), which suggested support price for paddy (common grade) at 1,080 a quintal and a bonus of 80 on top of it.

Rice is grown in both Kharif and Rabi season. The Kharif sowing begins with the start of the south west monsoon in June and harvest starts from October, 2011.

The CACP, which suggests MSP of 40 agri-commodities, has argued that the country’s rice output cannot be improved to meet demand of the proposed National Food Security Act unless paddy farmers do not get remunerative price.

Elaborating the need for hike in the paddy MSP, CACP chairman Ashok Gulati explained in the report submitted to the Agriculture Ministry that labour and energy costs have gone up by more than 20% in last one year. The maximum rise in costs was in Orissa at 43%.

The country is estimated to have produced 94.11 million tonnes in 2010-11 crop year. The proposed Food Bill is still underway and the foodgrains demand is expected to rise if the government decides to give subsidised foodgrains to both BPL and APL families under the law.