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Wheat MSP raised to Rs 1,080 per quintal
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Saturday, 31 January, 2009, 08 : 00 AM [IST]
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Our Bureau, New Delhi
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The Centre has raised the minimum support price (MSP) for wheat for the 2008-09 crop marketing season by 8% to Rs 1,080 per quintal from Rs 1,000 paid last year. The government has also announced the minimum support price for other rabi crops for the 2008-09 season. The MSP for barley has been raised by Rs 35 to Rs 680 per quintal. The MSP for gram has been fixed at Rs 1,730 per quintal, an increase of Rs 130 per quintal over the last year's price. The MSP for masur (lentil) has been fixed at Rs 1,870 per quintal, an increase of Rs 170. The MSP of safflower has been kept unchanged at Rs 1,650 per quintal but the MSP of rapeseed/mustard has been raised by Rs 30 per quintal and fixed at Rs 1,830 per quintal.
In the normal course, the MSPs should have been announced by October/November, prior to sowing operations so as to send the right price signal to farmers and influence their cropping decisions. But this time there has been a delay mainly due to the reservations by the finance ministry and the Planning Commission over granting MSP hikes in the background of the collapse of global commodity prices and the cost of maintaining large public grain inventories. There was also concern over the inflationary impact of higher MSPs in the run-up to parliament elections. But with overall inflationary pressures easing and the simultaneous need to keep farmers happy, the Centre has gone ahead with the hikes.
This year sowing of wheat is almost over in most parts of the country with as much as 27.5 million hectares already under the crop as against the target of 28.5 million hectares. According to officials wheat production in 2009 could reach a new record if weather remains conducive during the crop growing stage.
Last year, the FCI and state agencies procured a record 226.82 lakh tonnes of wheat on the back of an all-time high crop of 784.54 lakh tonnes. As on January 1, the FCI and state agencies were holding 180.62 lakh tonnes of wheat as against the normal minimum buffer of 82 lakh tonnes for this date. Even in the case of rice, the opening stocks of 173.54 lakh tonnes were much more than the buffer norm of 118 lakh tonnes.
The current season could lead to a repeat of the 2000-02 situation, when overflowing public warehouses forced the Centre to export grain at the price of chicken feed. Wheat stock hit a peak 413.17 lakh tonnes on June 1, 2002. The projected stocks for the same date this year are in the region of 330 lakh tonnes.
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