New Delhi: The agriculture ministry has proposed a hike of 115 per quintal in the minimum support price (MSP) of wheat to 1,285 per quintal to cover rising farm input cost and encourage farmers to increase acreage.

Wheat grains. Photo: Ramesh Pathania/Mint.

According to sources, the ministry has circulated a CCEA note among various ministries recommending 1,285 per quintal as MSP for wheat for the 2012-13 marketing year starting 1 April.

Wheat’s support price for 2011-12 was 1,170 per quintal, including a bonus of 50 per quintal.

The government announces the support price for more than 20 crops just before the sowing season.

The government buys wheat and paddy from farmers at the MSP to ensure assured returns to growers. The MSP also acts as benchmark price for the market.

The ministry has recommended a significant hike in wheat MSP in view of rising input cost of labour, electricity, diesel and fertilisers.

Since the UPA government came into power in 2004, the MSP of wheat has been raised from 630 per quintal to 1,170 per quintal.

Country’s wheat production has improved in the last few years and touched an all-time of 85.93 million tonnes in the 2010-11 crop year. Experts said higher support price has played a big role in the record wheat output.

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