22nd January 2022

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MSP increased for six crops

In the earliest announcement of minimum support prices in at least a decade, Agriculture Minister Narendra Singh Tomar told Lok Sabha that the cabinet had approved increases in the MSP for six crops, including a 2.6 % increase in wheat. Last year, the MSP for wheat increased 4.6%.

  • This comes amid vehement protests from farmers, who fear that further agricultural marketing reforms will lead to the phasing out of MSP and public procurement.
  • The MSP is the rate at which the government buys crops from farmers and is based on a calculation of at least one and a half times the cost of production borne by farmers.
  • The MSP for wheat will be increased from 2.6% or Rs 50 per quintal to Rs 1,975 per quintal for the next winter harvest season or rabi, according to the decision made on Monday by the Cabinet Committee on Economic Affairs.
  • MSP levels also increased for five other winter crops: barley, gram, masur dal, safflower, rapeseed and mustard.
  • For more than a decade, MSPs have been announced for the rabi season in October or November, when winter planting begins.
  • However, this year’s MSP announcement comes just a day after Parliament passed two controversial bills, which will facilitate contract farming and the sale of agricultural products outside the notified mandate of the agriculture produce Market Committee (APMC), where the majority of acquisitions are made.
  • Opposition parties and various farmer groups, including those affiliated with the RSS, have warned that the new legislation will lead to a dilution of the MSP regime and public procurement.
  • They ask the government to include a legal guarantee for MSPs to ensure that neither public nor private buyers pay lower rates than MSPs, whether the sales are made inside or outside mandis.
  • In fact, only a small percentage of farmers can sell to the government at MSP rates, although Tomar said purchases have skyrocketed in both quantity and value under the BJP government.
  • In 2019-2020, the government bought 36% more wheat compared to 2013-2014, with an 85% increase in value, according to data provided by the Ministry of Agriculture.
  • Regarding the purchase of rice, there was an increase in the quantity of 114% during the same period, with an increase of 192% in value.
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