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LATEST NEWS UPDATES | Kharif MSP hike to cost Centre Rs 33,500 crore more -Vishwa Mohan and Dipak K Dash

Kharif MSP hike to cost Centre Rs 33,500 crore more -Vishwa Mohan and Dipak K Dash

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published Published on Jul 4, 2018   modified Modified on Jul 4, 2018
-The Times of India

NEW DELHI:
Moving to fulfil its budget promise and address political heat over farmer discontent, the government is set to announce a new minimum support price (MSP) regime that will provide farmers a profit margin of 50% over cost of production. The additional bill is likely to be around Rs 33,500 crore.

The new MSP, to be considered by the cabinet on Wednesday, will largely apply to paddy and pulses but will benefit ‘nutri-cereals’ like millets the most. The added cost of MSP is 0.2% of GDP, according to the cabinet note. The share of paddy in the additional outgo will be around Rs 12,300 crore.

Moving away from a focus on rice and wheat, a range of crops will be covered by the promised MSP and a procurement mechanism will be announced later. The maximum weight in calculating cost of production has been accorded to labour, which is about 53% while other costs like fertilisers, farm animals, pesticides, seeds and irrigation add up to the rest.

Among millets, ragi (finger millet) will see a maximum hike of over 52% compared to its current MSP, followed by 42% for jowar (sorghum) and 36% for bajra (pearl millet). The hike in MSP of nigerseed (oilseed) and moong (pulse) is also expected to be much higher. As compared to other non-cereal crops, pulses have been procured in larger quantities.

The main Kharif crop, however, remains paddy. The revised MSP will be Rs 200 higher than the current Rs 1,550 per quintal. Last year, the procurement of paddy stood at 38 million tonnes. Farmers in some states are already getting a price that equals or exceeds 150% of production cost and this will remain untouched. States such as West Bengal, Assam and Maharashtra, with lower yields and productivity, will gain.

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The Times of India, 4 July, 2018, https://timesofindia.indiatimes.com/india/kharif-msp-hike-to-cost-centre-33500cr-more/articleshow/64848114.cms


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