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LATEST NEWS UPDATES | Centre hikes pulses MSP but experts say too little, too late

Centre hikes pulses MSP but experts say too little, too late

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published Published on Nov 6, 2015   modified Modified on Nov 6, 2015
-The Indian Express

The minimum support price (MSP) for the two pulse crops has been raised by Rs 250 per quintal over their levels in the 2014-15 rabi season.

In a bid to encourage farmers to grow more pulses amidst soaring dal rates, the Centre Thursday increased the procurement price of chana (gram) and masur (lentil) planted in the current rabi season by around 10.5 per cent.
 
The minimum support price (MSP) for the two pulse crops has been raised by Rs 250 per quintal over their levels in the 2014-15 rabi season. A one-time bonus of Rs 75/quintal has also been granted over and above these, taking the effective procurement price to Rs 3,500 per quintal for chana and to Rs 3,400 per quintal for masur.

An official release after a meeting of the Cabinet Committee of Economic Affairs (CCEA) said that the decision taken will “give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses”.

Experts, however, believe that the hike is too little, too late. Chana is now trading in markets such as Latur and Akola (Maharashtra), Bikaner and Sri Ganganagar (Rajasthan) and Gulbarga (Karnataka) at Rs 4,800- 5,000 per quintal. Wholesale prices of masur are similarly ruling at Rs 5,500-6,000 per quintal in Jabalpur, Sagar, Vidisha and other major mandis of Madhya Pradesh. The MSPs that have been declared are way below the market prices to influence planting decisions of farmers.

“Besides, the MSP fixation should have happened before mid-October, as that is when farmers take a call on which crop to sow. Plantings are already well underway now,” said S Chandra, Director of Indian Society of Agribusiness Professionals, a farm extension consultancy firm. The delay in MSP announcement was attributed to the Bihar Assembly elections, which got over only Thursday. 

Significantly, the Centre also raised the MSP of the 2015-16 wheat crop by Rs 75 to Rs 1,525 per quintal. This was more than the Rs 50/quintal annual increase in the last three years. With wheat stocks in the central pool at 32.45 million tonnes as on October 1 — almost 60 per cent more than the necessary level of 20.52 million tonnes — there was apparently a strong view within the government to even freeze the MSP. “But ultimately politics, especially the situation in Punjab where farmers are already agitated over damage to their cotton crop from whitefly attacks, prevailed,” sources said. 

Ashok Gulati, former chairman of the Commission for Agricultural Costs and Prices, felt that the MSP increase in wheat will result in farmers producing more wheat, thereby worsening the problem of already overflowing government warehouses. 

“We need to move away from fixing MSPs based purely on the supply curve. While farmers’ production costs have, no doubt, gone up, we need to also look at the demand side and encourage them to grow crops that the country really requires today,” he pointed out. 

The Centre also hiked the MSPs of rabi oilseeds, mainly rapeseed/mustard, by Rs 250 per quintal. But given the limited governmental procurement operations in pulses and oilseeds, it is the Rs 75/quintal increase in wheat that is seen to be really significant. 

The Indian Express, 6 November, 2015, http://indianexpress.com/article/india/india-news-india/centre-hikes-pulses-msp-but-experts-say-too-little-too-late/


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