In a positive signal to farmers, the union cabinet on Wednesday raised the minimum support price (MSP) for paddy by Rs 60 per quintal and also announced bonus for pulses and oilseeds.
The Cabinet Committee on Economic Affairs (CCEA), in its meeting presided over by Prime Minister Narendra Modi, decided to give a bonus, over and above the recommendations of the Commission for Agricultural Costs and Prices (CACP) of Rs 425 per quintal for Kharif pulses - for arhar (Tur), urad and moong and also for oilseeds to give a strong "price signal" to farmers to target higher productivity of pulses and oilseeds.
"The prices would be effective from October 1. The higher MSPs would increase investment and production through assured remunerative prices to farmers," said Agriculture Minister Radha Mohan Singh later.
The approved MSP is based on recommendations of the CACP which takes into account the cost of production, overall demand-supply, domestic and international prices, an official source said.
The MSP decision would also address inter-crop price parity, terms of trade between agricultural and non-agricultural sectors "besides ensuring rational utilization of production resources like land and water", the source said.
Following the decision the price for the standard grade of paddy would be Rs 1,470 per quintal from the existing Rs 1,410, while minimum price for the Grade 'A' paddy has risen to Rs 1,510 from Rs 1,450 per quintal for kharif (or summer) production.
The CACP being the expert body, its recommendations are generally accepted by the government.
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However, official sources said in view of the gap in the demand and domestic supply of pulses and oilseeds, the CCEA has decided to give a bonus, over and above the recommendations of the CACP of Rs.425 per quintal for Kharif pulses, namely Arhar (Tur), Urad and Moong.
Similarly, a bonus of Rs.200 per quintal for aesamum and a bonus of Rs.100 per quintal for kharif oilseeds namely, groundnut-in-shell, sunflowerseed, soyabean, and nigerseed have been also announced.
"This is expected to give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses and oilseeds," the source said.
--IANS
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