The Hindu Business Line : Rs 65 hike in paddy MSP proposed

New Delhi April 26 With wheat procurement faltering and putting pressure on its precarious grain inventory position, the Centre, it seems, does not want to take any chances. And that explains why the Commission for Agricultural Costs and Prices (CACP) has recommended a record Rs 65 per quintal increase in the minimum support price (MSP) for the forthcoming 2007-08 paddy crop.

The CACP has proposed an MSP of Rs 675 per quintal for Grade `A' paddy and Rs 645 per quintal for common varieties to be procured during the kharif marketing season, beginning October. For the 2006-07 season (October-September), the corresponding MSPs were Rs 610 and Rs 580 per quintal, respectively. In addition, the Centre had announced an incentive bonus of Rs 40, taking the effective procurement price of the 2006-07 crop to Rs 650 and Rs 620 per quintal for Grade `A' and common paddy, respectively.

"This time, a Rs 65 increase has been recommended in the MSP itself, outside of any extra bonus. If accepted, that would constitute the largest ever jump in any single year," a State Government official told Business Line. Just to illustrate: Between 2000-01 and 2005-06, the effective procurement price of paddy went up by Rs 60 per quintal. If one includes the CACP's latest recommendation for 2007-08, the increase over just two years would come to Rs 75 per quintal.

"Till recently, the CACP was adopting a conservative cost-based approach in recommending support prices to the Centre. But now, even it is having to take into account market realities and the public grain stocks position. Food security considerations have become paramount in official calculations," they pointed out.

The Centre's worry right now is the lag in wheat procurement, with Government agencies buying only 71.09 lakh tonnes (lt) during the 2007-08 rabi marketing season (April-June) as on Thursday, compared to 84.25 lt in the same period of 2006-07. The 2006-07 season as a whole saw procurement hit a 10-year-low of 92.25 lt. The Centre has targeted to purchase 151 lt this season, which, however, looks difficult to achieve.

More Stories on : Agricultural Policy | Rice

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Dust storms unable to bring down mercury

Suzlon's 44 wind turbines shut down in Maharashtra

Abridged balance sheets for shareholders

FIPB ruling on Vodafone-Hutch deal likely today

India now a trillion-dollar economy

Indian mango on way to US markets

Reliance full year net tops Rs 10,000 crore

`Commercial property rentals in tier-1 cities still rising'

AOL launches Indian portal

Rs 65 hike in paddy MSP proposed

Hopes on financial results lift bank stocks

TV remote may soon double as phone