The Cabinet Committee on Economic Affairs (CCEA) approved these two decisions in its meeting held here.
The minimum support price of wheat has been increased by Rs 65 per quintal to Rs 1,350 per quintal, Finance Minister P Chidambaram told reporters here after the meeting.
The CCEA had not fixed the minimum support price (MSP) of wheat while approving the MSPs of other rabi crops for 2012-13 crop year (July-June) in its meeting held in November.
It had asked the CACP, government body that suggests farm pricing policy, to relook into the issue following differences between the Agriculture and Finance ministries.
In its proposal, the Agriculture Ministry had suggested an increase of Rs 100 per quintal in wheat MSP.
Earlier, sources had said that the ministry turned down the recommendation of the Commission for Agricultural Costs and Prices (CACP) to freeze wheat MSP at last year's level and provide a bonus of Rs 40 per quintal to farmers.
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The increase in wheat MSP would enthuse farmers to cover more area under crop. Till last week, farmers have sown wheat in 25.3 million hectare, marginally lower than 25.7 million hectare in the same period last year.
The CCEA also approved a proposal of the Food Ministry to allow export of an additional 2.5 million tonnes of wheat from the FCI godowns.
In June, the government had allowed export of 2 million tonnes of wheat from FCI godowns to clear surplus stocks. The entire quantity has been contracted for shipment and 1 million tonnes of it has already been exported.
This takes the total approval for wheat exports to 4.5 million tonnes.