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LATEST NEWS UPDATES | Food ministry against CACP’s proposal on paddy MSP hike

Food ministry against CACP’s proposal on paddy MSP hike

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published Published on May 16, 2011   modified Modified on May 16, 2011
-Press Trust of India
 
The food ministry has opposed the proposal of the Commission for Agriculture Costs and Prices (CACP) to hike the support price of paddy by R160 per quintal to R1,160 per quintal for 2011-12 crop year.

Paddy minimum support price (common grade) was at R1,000 per quintal last year. The CACP, which suggests minimum support price (MSP) of 40 agri-commodities, has recommended support price for paddy (common grade) at R1,080 per quintal and on top of it a bonus of R80 per quintal for the 2011-12 crop year (July-June).

According to official sources, “The food ministry is in favour of the paddy MSP of R1,080 per quintal and not a bonus of R80 per quintal as it may cause pressure on food inflation.”

The ministry is also of the view that higher paddy MSP will increase government’s subsidy burden, sources said. Rice is grown in both kharif and rabi season. The kharif sowing begins with the start of the south west monsoon in June and harvest starts from October, 2011.

At present, the concerned authorities like agriculture ministry, food ministry and finance ministry are vetting the CACP’s MSP proposal for paddy and other crops for 2011-12.

The CACP has argued that higher paddy MSP is necessary as cost of production has risen by 20% in last one year. The country’s rice output cannot be enhanced to meet demand of the proposed National Food Security Act unless farmers are paid remunerative price, it noted.

Meanwhile, sources said that the agriculture ministry has recommended paddy MSP of R1,160 per quintal excluding the bonus part. The ministry’s suggestion is in line with CACP.

The proposal to increase the MSP of kharif crops is likely to be placed before the Cabinet Committee on Economic Affairs (CCEA) next week, sources said.

The country is estimated to have produced 94.11 million tonne of rice in 2010-11 crop year. The proposed Food Bill is still under way.

The Financial Express, 16 May, 2011, http://www.financialexpress.com/news/Food-ministry-against-CACP-s-proposal-on-paddy-MSP-hike/791245/


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