Wheat MSP may be hiked to Rs 750

The government is likely to announce a minimum support price of Rs 750 per 100 kg for wheat for the new rabi season, a government official said today.

He said the issue is pending with the Cabinet Committee of Economic Affairs, which may take a decision at its next meeting.

"The state governments, particularly Punjab, have been asking for a minimum support price of Rs 900 per 100 kg. Such a high MSP in not realistic, but we may consider a bonus over and above Rs 750 per 100 kg depending on the open market prices during the harvesting season," the official said.

In the last rabi season, the government had set the wheat MSP at Rs 650 per 100 kg, but later announced a bonus of Rs 50 to ensure adequate procurement.

Higher open market prices during the procurement season, however, dented the government's procurement plan and it could buy only 9.2 million tonne wheat from farmers compared with 14.8 million tonne a year ago. For the new rabi season, state governments have been clamouring for a higher wheat MSP.

During the conclave of chief ministers of Congress-ruled states last month, states asked the central government to announce wheat MSP commensurate with market prices.

Minister of State for Agriculture, Consumer Affairs, Food and Public Distribution Akhilesh Prasad had last month said the government was planning to increase the wheat MSP to ensure adequate stocks.

"Higher wheat MSP announced before sowing commences is aimed at encouraging farmers to grow more wheat," the official said.

The government is targeting 6 million tonne higher wheat output in 2007.

According to the government's fourth advance estimates for the rabi season, India's wheat output in 2006 was 69.48 million tonne.