In keeping with the promise made in this year’s Budget speech, the Union Cabinet has approved a hike in minimum support prices (MSPs) for kharif crops so that they are 50% higher than the cost of production, not including land costs.
The decision was taken by the Cabinet Committee on Economic Affairs headed by Prime Minister Narendra Modi.
This includes a Rs. 200 per quintal increase in the MSP for paddy, which is likely to inflate the food subsidy bill by over Rs. 15,000 crore.
Jowar, cotton also in list :-
MSPs were announced for 14 commodities, with major hikes being seen in cereals such as bajra, jowar and ragi, as well as cotton.
Seven of these 14 crops have reported hikes of nearly 20% or more, compared with the MSP of these crops in 2017-18. However, in percentage terms, this year’s MSP for paddy of Rs. 1,750 per quintal is only a 12.9% increase from last year’s MSP of Rs. 1,550 per quintal.
The larger message of the new MSP regime is to encourage farmers to cultivate pulses, oilseeds and millets. Pulses and millets will ensure nutritional security while more oilseed production will help reduce the import bill.