The government today raised the minimum support price (MSP) of paddy for procurement in the new kharif season, beginning October, by 11.76 per cent to Rs 950 per quintal for common grade paddy and by 11.36 per cent to Rs 980 for grade-A paddy.
The decision was taken by the Cabinet Committee on Economic Affairs (CCEA). The increase has been in line with the recommendations of the Commission for Agricultural Costs and Prices (CACP). MSP is the price at which the government procures paddy from farmers.
The purchasing price of tur (arhar) has been increased by 15 per cent to Rs 2,300 a quintal. The MSP of moong and sesamum has been increased by 9.52 per cent and 3.64 per cent to Rs 2,760 and Rs 2,850 a quintal, respectively. However, the procurement price of crops like maize, urad, cotton and bajra have been kept unchanged.
“It will be an incentive for the farmers and the government will continue to respond to the evolving needs of the farmers in the time to come. I hope farmers will offer surplus paddy for procurement this year,” Home Minister P Chidambaram told reporters.
In the 2008-09 kharif marketing season (October-September), the government has so far procured a record 32.5 million tonnes (mt) of rice. The rise in MSP is expected to help the government boost procurement in the new season, beginning October, even though the production of rice has been projected to decline by 10 mt due to deficient rains.
Some experts also expect that the increase will fuel food inflation. The consumer price index for agricultural and rural labourers stood at 12.9 per cent and 12.67 per cent, respectively, for the month of July 2009, up from 11.52 per cent and 11.26 per cent in the previous month.
