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Surging food inflation has prompted the government to increase the minimum support price (MSP) for wheat during 2014-15. On Thursday, the Cabinet Committee on Economic Affairs (CCEA) cleared an increase of Rs 50 a quintal for procurement.
“Wheat MSP has been increased by Rs 50 per quintal to Rs 1,400 for the 2014-15 crop year (April-March) as against Rs 1,350 last year,” said Food Minister K V Thomas.
CCEA also approved an increase of Rs 50 for mustard MSP, to Rs 3,050 a quintal. The support price for chana (gram) was raised by Rs 100 to Rs 3,100 a quintal. For masur, the MSP was increased by Rs 50 to Rs 2,950 a quintal and safflower by Rs 200 to Rs 3,000 a quintal.
While the increase in wheat MSP is the same as recommended by the government advisory body, Commission for Agricultural Costs and Prices (CACP), the agriculture ministry had pitched for a rise of Rs 100 a quintal on wheat MSP.
On the reasons for rejecting the agriculture ministry’s proposal, Thomas said: “We are concerned about inflation and we can control prices of foodgrains, which we procure.”
In the 2013-14 crop marketing season (April-March), CACP had recommended freezing of the wheat MSP at the existing Rs 1,285 a quintal. The Commission had said the huge wheat stocks with the government did not make raising MSP a feasible option.
However, following strong opposition from various quarters, it had to review its decision. The government later fixed the wheat MSP at Rs 1,350 a quintal — an increase of Rs 65 a quintal. The government procures wheat from farmers at MSP during April-June.
Wheat is the main crop grown in the rabi (winter) season. Wheat sowing begins in October and harvesting starts from April. India produces 90-95 million tonnes of wheat every year.
The wholesale price index-based food inflation has been hovering around 18 per cent for August and September. However, the rate of price rise in wheat declined to 5.90 per cent in September from 7.60 per cent in August.
“Wheat MSP has been increased by Rs 50 per quintal to Rs 1,400 for the 2014-15 crop year (April-March) as against Rs 1,350 last year,” said Food Minister K V Thomas.
CCEA also approved an increase of Rs 50 for mustard MSP, to Rs 3,050 a quintal. The support price for chana (gram) was raised by Rs 100 to Rs 3,100 a quintal. For masur, the MSP was increased by Rs 50 to Rs 2,950 a quintal and safflower by Rs 200 to Rs 3,000 a quintal.
While the increase in wheat MSP is the same as recommended by the government advisory body, Commission for Agricultural Costs and Prices (CACP), the agriculture ministry had pitched for a rise of Rs 100 a quintal on wheat MSP.
On the reasons for rejecting the agriculture ministry’s proposal, Thomas said: “We are concerned about inflation and we can control prices of foodgrains, which we procure.”
In the 2013-14 crop marketing season (April-March), CACP had recommended freezing of the wheat MSP at the existing Rs 1,285 a quintal. The Commission had said the huge wheat stocks with the government did not make raising MSP a feasible option.
However, following strong opposition from various quarters, it had to review its decision. The government later fixed the wheat MSP at Rs 1,350 a quintal — an increase of Rs 65 a quintal. The government procures wheat from farmers at MSP during April-June.
Wheat is the main crop grown in the rabi (winter) season. Wheat sowing begins in October and harvesting starts from April. India produces 90-95 million tonnes of wheat every year.
The wholesale price index-based food inflation has been hovering around 18 per cent for August and September. However, the rate of price rise in wheat declined to 5.90 per cent in September from 7.60 per cent in August.
