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Friday, Jan 30, 2009
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Business Daily from THE HINDU group of publications Friday, Jan 30, 2009 ePaper | Mobile/PDA Version | Audio | Blogs |
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Agricultural Policy Agri-Biz & Commodities - Wheat Wheat support price hiked to Rs 1080/quintal
Our Bureau New Delhi, Jan.29 After much dithering, the Centre has finally announced the minimum support prices (MSP) for the current year’s rabi crops. The MSP for the standing 2008-09 wheat crop — to be marketed from April onwards — has been increased by 8 per cent to Rs 1,080 a quintal. The new price, approved by the Cabinet Committee on Economic Affairs (CCEA) on Wednesday, is likely to aggravate the problem of overflowing public grain inventories. Way above buffer normAs on January 1, the Food Corporation of India (FCI) and State agencies were holding 180.62 lakh tonnes (lt) of wheat, as against the normative minimum buffer of 82 lt for this date. Even in the case of rice, the opening stocks of 173.54 lt were much more than the buffer norm of 118 lt. Last year, the FCI and State agencies procured a record 226.82 lt of wheat on the back of an all-time-high crop of 784.01 lt. This year, farmers have planted more area under wheat and, going by the trends so far, the country is set to harvest yet another bumper crop. And with domestic market prices ruling easy — wheat dara is trading below Rs 1,200 a quintal in Delhi, that too in the lean season when the new crop is still is the field — and the Centre not allowing exports, most of this grain is likely to devolve on government agencies. That could lead to a repeat of the 2000-02 situation, when overflowing public warehouses forced the Centre to export grain at the price of chickenfeed. Wheat stocks hit a peak of 413.17 lt on June 1, 2002. The projected stocks for the same date this year are in the region of 330 lt. The CCEA also hiked the MSPs for rapeseed-mustard, gram, barley and masur (lentil), while leaving the same unchanged for safflower. The new MSPs are in line with the recommendations of the Commission for Agricultural Costs & Prices (CACP). In the normal course, the rabi MSPs should have been announced by October-November, prior to sowing operations so as to send the right price signal to farmers and influence their cropping decisions. But this time, there has been a delay mainly due to the Finance Ministry’s and Planning Commission’s reservations over granting MSP hikes in the background of the collapse of global commodity prices and the cost of maintaining large public grain inventories. There were also concerns over the inflationary impact of higher MSPs in the run-up to Parliament elections. But with overall inflationary pressures easing and the simultaneous need to keep farmers happy — especially the vocal wheat growers of Punjab, Haryana and Uttar Pradesh — the Centre has gone ahead with the hikes. Centre dithers over MSP for wheat, rapeseed-mustard Record wheat crop on cards More Stories on : Agricultural Policy | Wheat
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