The Cabinet Committee on Economic Affairs, met here on Tuesday, announced an increase of 2% to 9% in the Minimum Support Prices (MSP) for six mandated rabi crops for this season. The sowing of the six crops has started.
The farmers’ organisations, who have been alleging that the Centre is delaying the announcement of the MSP, said the increase in paltry and by keeping the MSP of wheat low, the Centre is helping big corporate houses in the sector to make quick money. They said farmers will be forced to sell their produce the private traders like last year as the MSP is low.
For wheat, the MSP is ₹2,125 for a quintal. Last year, the price was ₹2,015 and the increase this year ₹110. The Centre said the cost of production in the ongoing season for a quintal is ₹ 1065 return over cost for the farmer is 100%. The Centre calculates the cost by considering the all paid out costs such as those incurred on account of hired human labour, bullock labour/machine labour, rent paid for leased in land, expenses incurred on use of material inputs like seeds, fertilizer, manures, irrigations charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets etc., misc. expenses and imputed value of family labour.
Samyukt Kisan Morcha leader Ashok Dhawale said the the increase is paltry and meaningless compared to the tremendous increase in the cost of production. “Fertilizer prices have gone up the roof. Tremendous black marketing is taking place and farmers have to wait for hours to buy fertilizer. Seeds, pesticides, diesel, power and irrigation costs have also increased,” he said. Dr. Dhawale added that precisely because of the less MSP, farmers had to sell a large amount of wheat to private parties and today we have to face the music. “The grain stocks are at an all-time low. By keeping the MSP low, the Centre is helping big private players in the field to make a fast buck. This will badly affect the food security of the country. In their craze for helping the corporate houses, the Centre doesn’t mind letting the country starve. We have seen this as our position in the global hunger index has come down further,” he said.
For lentil, (Masur) the increase is ₹500 per quintal (₹6000) followed by rapeseed and mustard at ₹400 per quintal (₹5,450). For safflower, Centre approved an increase of ₹ 209 per quintal (₹ 5,650). For gram and barley also the increase is ₹ 105 (₹5,335) and ₹ 100 (₹ 1,735) respectively per quintal.
The Centre claimed that the increase in MSP is in line with the Budget 2018-19 announcement of fixing the MSP at a level of at lease 1.5 times of the all-India weighted average cost of production, aiming at reasonably fair remuneration for the farmers. “The maximum rate of return is 104% for rapeseed and mustard, followed by 100% for wheat, 85% for lentil, 66% for gram, 60% for barley and 50% for safflower,” the government release said.
Madan Sabnavis, Chief Economist, Bank of Baroda said the MSPs have been raised keeping in mind the need to provide farmers fair remuneration. “This year however, the government would have interest in ensuring that wheat procurement is on target as stocks have come down as of September due to deployment in the PM food scheme for the poor. The inflation concern is however still there as higher prices offered for wheat could lead to market prices rise by a higher rate. Wheat/atta inflation for September was at 17.4% while masur was at 6.6%. In case of gram, it was less than 1%, hence a low increase in MSP. The 7.9% increase in MSP for mustard is to enable farmers to increase their production which will help to lower import dependency of edible oils,” he explained.