The Commission for Agricultural Costs and Prices may recommend higher prices in its report.
The Commission for Agricultural Costs and Prices (CACP) may recommend higher minimum support price (MSP) for cotton and sunflower in its report.
“Cost of production for most crops have gone up by 10-30 per cent over the last year, due to higher inputs costs like labour and fodder. Cotton has fetched higher market prices compared to its MSP of Rs 2,500-3,000 a quintal. Similarly, sunflower, one of major oil seeds in India, needs to be self sufficient.
Higher MSP for sunflower will encourage farmers to grow more. For both cotton and sunflower, MSP may go up by Rs 1,000-1,200 a quintal,” said a highly placed sources in the ministry, closely associated with the development.
| GOOD PROSPECTS | ||
| Crop | MSP (Rs/quintal) | Market price Rs/quintal (2010-2011) |
| Paddy | 1000 | 900-1220 |
| Cotton | 3000 | 6100-6900 |
| Jowar | 880 | 950-1050 |
| Bajra | 880 | 750-2200 |
| Ragi | 965 | -- |
Annually, CACP recommends MSP for kharif and rabi seasons and it is expected to submit its recommendations soon for the 15 kharif crops for 2011-12. Based on the report, the ministry of agriculture decides the MSP for various crops.
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The review covers 15 kharif crops – cereals: paddy, jowar, bajra, maize , ragi; pulses: tur, urad, moong; oil seeds: groundnut, soyabean, sunflower, sesame, nigerseed and fibre crops: cotton and tobacco.
Paddy has also gained significance as it is a staple cereal crop grown in most parts of India but consistent lower MSP is squeezing the fair share for farmers. MSP for paddy may be increased by Rs 80-100 per quintal, official sources said.
For all other crops, prices may go up in the range of Rs 5-10 per kg to a maximum of 20-30 per cent, sources said, without divulging more details.
Besides, the report may recommend waiving off mandi tax for lowering wholesale and retail prices for foodgrain and entry of private retail trade in procuring foodgrain under the public distribution system alongwith Food Corporation of India. It is also of the view that if the cost of production of a certain crop is very high and international prices are ruling low, it is better to import the item instead of increasing the cost for consumers.
“At present, on an average 50 per cent of farmers have been covered under MSP. Therefore it may be suggested that if a farmer is not covered under MSP then there must be other compensatory mechanism besides a strong pitch for focused agricultural budget for seed and technology development.”
“Since productivity of Punjab and Haryana has already peaked, the focus should now shift to a second green revolution in eastern states. Punjab and Haryana may grow other crops like sunflower,” the official said.
CACP is of the view that higher inflation is not due to MSP or high price of foodgrain but due to higher prices of meat, diary products and fish.
MSP analysis has been done from two angles — the farmers covered under MSP and the share of the total production covered under MSP.
Determination of MSP takes into account cost of production, changes in input prices, input-output price parity, trends in market prices, demand and supply, inter-crop price parity, effect on industrial cost structure, effect of cost of living, effect on general price level, international price situation, parity between prices paid and prices received by the farmers and effect on issue prices and implications for subsidy.