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Business News/ Industry / Agriculture/  Cabinet approves hike in MSP of kharif crops for 2023-24
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Cabinet approves hike in MSP of kharif crops for 2023-24

The MSP serves as a crucial safety net for farmers in India, with the government guaranteeing a minimum price for their produce. It also helps ensure food security and stabilizes market prices of staples. The government also uses the MSP to encourage farmers to cultivate certain crops.

MSP for paddy has been fixed at  ₹2,183 per quintal, against  ₹2,040 per quintal in the last season.Premium
MSP for paddy has been fixed at 2,183 per quintal, against 2,040 per quintal in the last season.

New Delhi: The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved raising minimum support prices (MSP) of kharif crops for the 2023-24 marketing season.

The hike in MSP will “ensure remunerative prices to the growers for their produce and encourage crop diversification," Food and Consumer Affairs Minister Piyush Goyal said while briefing reporters on the decisions taken by Union Cabinet.

Mint had reported in May that the government was considering a 3-8% increase in MSP for key kharif crops.

MSP for moong was raised the most among all 14 kharif crops to 8,558 per quintal from last year’s 7,755 a quintal. After moong, the second-highest hike in MSP has been for sesame to 8,635 a quintal from 7,830 set for the 2022-23 kharif marketing season.

The MSP serves as a crucial safety net for farmers in India, with the government guaranteeing a minimum price for their produce. It also helps ensure food security and stabilizes market prices of staples. The government also uses the MSP to encourage farmers to cultivate certain crops.

MSP for paddy (common) has been fixed at 2,183 per quintal, against 2,040 per quintal in the last season, while the MSP for paddy (grade A) has been fixed at 2,203 per quintal, up from last year’s 2,060 per quintal.

Other coarse cereals’ MSP has been hiked by 6.3-7.8%, with that of bajra fixed at 2,500, up from 2,350 per quintal fixed in 2022-23. Maize MSP has been raised to 2,090 for the 2023-24 against 1,962 a year ago.

The Centre has fixed cotton MSP at 6,620 a quintal for medium staple variety and 7,020 per quintal for long staple variety. 

“The increase of 8.9% in MSP of cotton is good news as the farmers who had withheld cotton have realised lower prices, while Paddy MSP is more than the same in maize," said former union agriculture secretary Siraj Hussain. “It seems that there is a realisation that maize cannot really be used for ethanol."

The MSP of tur (arhar or pigeon pea) and urad (black gram) has been increased by 400 to 7,000 a quintal and 350 to 6,950, respectively, for the 2023-24 kharif marketing season.

Sunflower MSP stands at 6,760 against last year’s 6,400 a quintal, groundnut MSP has been fixed at 6,377 a quintal, up 527 from a yeae ago and soybean (yellow) at 4,600 per quintal, 300 higher than the 2022-23 kharif marketing season.

“While the MSP press release providing reference cost data suggests the reference cost is for the 2023-24 kharif season, it does not seem to be the case. Cost data seems to be from 2020-21 cost of cultivation estimates, which means that the MSP misses to compensate for cost increase from 2021-22 to 2023-24," said Anil Sood, a farm expert. “Cost data in the press releases seems close to B2 cost of 2020-21, which covers the paid-out costs and some part of the imputed cost of family labour and own land."

“The imputed value of labour and land are extremely low and don’t provide for a fair cost of living for a farming family. It is, therefore, not surprising that the farming community has been struggling for years and we have farmers giving up farming. We must link imputed values to fair cost and reference C3 costs for MSP, if we do want rural economy to progress. 9-year CAGR in MSP suggests that we just about cover the cost of general inflation for paddy and maize farmers," Sood added.

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ABOUT THE AUTHOR
Puja Das
Puja Das is a New Delhi based policy reporter covering food, farm, fertiliser, water, and climate policies for Mint. Puja reports on farmers' distress and how the agriculture sector is impacting India's rural economy and policy initiatives to help meet the pledges made at COP27. Puja holds a post-graduation degree in Broadcast Journalism from the Indian Institute of Journalism & New Media, Bangalore.
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Updated: 07 Jun 2023, 06:05 PM IST
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