MSP of Common Paddy increased by Rs.200 per quintal

CCEA (Cabinet Committee on Economic Affairs) on July 4, 2018 hiked the minimum support price (MSP) for paddy by a record 200 rupees per quintal. The government’s price advisory body CACP has calculated production cost of paddy at 1,166 rupees per quintal. Accordingly the government has raised the MSP of paddy (common grade) by 200 rupees to 1,750 rupees per quintal for 2018-19 season.

• • The cabinet has approved the MSP of 14 Kharif crops for the 2018-19 season.
  • The support price of Grade A variety of paddy has been raised by 180 rupees per quintal to 1,770 rupees.
  • The increase in paddy MSP is 50-51 per cent over its production cost.
  • The hike in the MSP will cost the exchequer over 15,000 crore rupees.
  • As per the Union Home Minister Rajnath Singh, the decision will increase the income of farmers and purchasing capacity, which will have impact on wider economic activity. Replying to a queries on likely impact of MSP hike on price rise.
  • The MSP of cotton (medium staple) has been raised to 5,150 rupees from 4,020 rupees and that of cotton (long staple) to 5,450 from 4,320 rupees per quintal.
  • In pulses, tur MSP has been raised to 5,675 per quintal from 5,450 rupees, and that of moong to 6,975 per quintal from 5,575 rupees. Urad MSP has been hiked to 5,600 from 5,400 rupees per quintal.
  • Among oilseeds, MSP of soyabean has been increased to 3,399 rupees per quintal from 3,050 rupees while that of groundnut (shell) to 4,890 rupees per quintal from 4,450.
  • The Budget for 2018-19 had indicated that a paradigm shift in the agricultural policies is needed to achieve the objective of doubling farmers’ income by 2022 through greater emphasis on generating higher incomes of farmers. The increase in the MSPs of Nigerseed at Rs.1827 per quintal, moong by Rs.1400 per quintal, sunflower seed by Rs.1288 per quintal and cotton by Rs.l 130 per quintal is unprecedented.

Farmer friendly initiatives by the Government

• • Besides increase in Minimum Support Prices (MSP) of kharif crops, Government has also taken several farmer friendly initiatives. These are as follows:
    • The premium rates to be paid by farmers are very low – 2 % of sum insured for all kharif crops, 1.5% for all rabi crops and 5 % for commercial and horticulture crops under smart technology through phones & remote sensing for quick estimation and early settlement of claims. The Government has also launched a Mobile App “Crop Insurance” which will help farmers to find out complete details about insurance cover available in their area and to calculate the insurance premium for notified crops.
    • The Government has also launched a scheme to develop a pan India electronic trading platform under ‘National Agriculture Market’ (NAM) aiming to integrate 585 regulated markets with the common e-market platform in order to facilitate better price discovery and ensure remunerative prices to farmers. Each State is being encouraged to undertake three major reforms – allow electronic trading, have a single license valid throughout the State and a single entry point market fee. It will also enable farmers to discover better prices for their produce. As on 23^rd March, 2018, 585 markets in 16 States and 2 Union Territories have already been brought on the e-NAM platform.
    • Government has also formulated a new model Agricultural Produce and Livestock Marketing (Promotion & Facilitation) Act, 2017 to provide farmers market options beyond the existing APMC regulated market yards.
    • Soil Health Cards are being issued to farmers across the country. These will be renewed every two years. The card provides information on fertility status of soil and a soil test based advisory on use of fertilizers. As on 25th June, 2018, 15.14 crore Soil Health Cards have been distributed.
    • Under Paramparagat Krishi Vikas Yojana (PKVY), the Government is promoting organic farming and development of potential market for organic products.
    • The Pradhan Mantri Krishi Sinchai Yojana is being implemented with the vision of extending the coverage of irrigation ‘Har Khet ko Pani’ and improving water use efficiency ‘Per Drop More Crop ‘ in a focused manner with end to end solution on source creation, distribution, management, field application and extension activities.
    • Government is focusing on improving production and productivity of crops such as rice, wheat, coarse grains and pulses under the National Food Security Mission.
    • A dedicated online interface e-Krishi Samvad provides direct and effective solutions to problems faced by farmers.
    • Government is encouraging formation of Farmer Producer Organisations. The Budget for 2018-19 has extended a favourable taxation treatment to Farmer Producers Organisations (FPQs) for helping farmers aggregate their needs of inputs, farm services, processing and sale operations.
    • Government has set up a buffer stock of pulses and domestic procurement of pulses is also being done under Price Stabilization Fund (PSF) mainly with a view to protect consumers. The Budget for 2018-19 indicated that increasing MSP. is not adequate and it is more important that farmers should get full benefit of the announced MSP. For this, it is essential that if price of the agriculture produce market is less than MSP, then Government should purchase either at MSP or work in a manner to provide MSP for the farmers through some other mechanism. NITI Aayog, in consultation with Central and State Governments, will put in place a fool-proof mechanism so that farmers will get adequate price for their produce.