Support price fails to cheer farmers

Only marginal change in MSP for most commodities.

Farmers across the country have expressed unhappiness over the government decision to retain minimum support price (MSP) for some commodities while effecting a minuscule raise in others for the kharif season 2006-07.

MSPs for maize, moong and urad, groundnut-in-shell, soybean black, sunflower seed and niger seed have been left unchanged while those for cotton (both medium and long staple length), paddy (common and grade A), soybean yellow, sesame and tur (arhar) have been increased by Rs 10 a quintal.

For hybrid jowar, bajra and ragi, MSPs have been raised by Rs 15 a quintal. The Cabinet Committee on Economic Affairs approved aforementioned MSP on Thursday for the kharif season 2006-07 on the recommendations of the Commission for Agricultural Costs and Prices.

Farmers were optimistic about a substantial rise in procurement prices to bring MSP in line with the spot market.

"We were expecting MSP to go up this year in line with the spot market. But the government did not raise it up to the extent farmers were expecting. We expect that the government agencies would not be able to procure anything this year," said K C Bhartiya, president, the Pulses Importers' Association of India.

Last year, a majority of farmers preferred not to sell their kharif output to the government-appointed nodal agencies on expectations of higher realisations they would get from private buyers. With commodities exchanges painting a rosy picture, only small and needy farmers sell their output soon after harvesting, while others prefer to store and sell their products only when futures prices appreciate.

"MSP is an insurance to farmers which should always be higher than the spot price. Higher prices would lure farmers to produce more and more," Bhartiya said.

"MSP remained lower than the spot price throughout the year. Therefore, only few farmers supplied their kharif to the government agencies. This year, the procurement by these agencies would be much lower," an industry source said.

Meanwhile, the government today confirmed a 40 per cent slump in its targeted level of wheat procurement this year, and this is a pointer to the issue of not raising MSP sufficiently.

"The government has managed to procure only 9.2 million tonne of wheat this year against the targeted 16 million tonne," said Union Agriculture Minister Sharad Pawar, in Parliament today, while answering a question.

"This year, overall production of wheat has dropped. It is not as per our expectations," he added.