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LATEST NEWS UPDATES | Paddy, pulses support price hiked

Paddy, pulses support price hiked

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published Published on Jun 12, 2010   modified Modified on Jun 12, 2010

THE government on Thursday raised the minimum support price of paddy by Rs 50 per quintal to Rs 1000 per quintal in what may push up its food subsidy bill, pegged at Rs 5 5,578.18 crore in the current fiscal.

The Cabinet Committee on Economic Affairs chaired by Prime Minister Manmohan Singh also increased the minimum support price of pulses by up to Rs 700 to touch Rs 3,170 a quintal. The government expects this would encourage more farmers to cultivate pulses, which is the main source of protein for most Indians. However, as farmers are already getting more than the MSP for their pulses in most states and the Central government itself does not procure pulses to prevent distress sale, this move is unlikely to give sowings a significant push.

The MSP for pulses, considered to be the wholesale market benchmark, is just about 30—50 % of the prevailing retail prices of some varieties like moong, urad and arhar that are being sold for up to Rs 100 a kg in retail market. India is a net importer of pulses and the sharp rise in prices is on account of higher commodity prices globally. This is largely as it is grown only in Myanmar and Australia. The country produced 14.77 million tonnes in 2009-10 against a requirement of 18-19 million tonnes.

The highest increase was in the case of widely consumed arhar dal (tur). The MSP for tur has been raised to Rs 3,000 per quintal from Rs 2,300 last year.

The MSP for moong, another popular variety, has been increased to Rs 3,170 per quintal from Rs 2,760. Support price for urad has been increased to 2,900 a quintal from Rs 2,520 last year. “The hike in MSP for arhar is Rs 200 more than what the Commission for Agricultural Costs and Prices had recommended considering the importance of this pulse,” said Ambika Soni, minister for information and Broadcasting.

Arhar dal prices had skyrocketed to about Rs 100 a kg a year ago and even now it is ruling above Rs 70 a kg. Moong is selling above Rs 100 a kg in the retail market. In addition, an additional incentive at the rate of Rs. 5 per kg for tur, urad and moong sold during the harvest or arrival period of two months to procurement agencies shall also be provided.

Unlike in the case of paddy and wheat, the government does not procure pulses from farmers, but it intervenes if prices fall below the MSP.

The MSP for paddy (common variety) has been increased to Rs 1,000 per quintal from Rs 950 last year, while the new MSP for Grade A variety stands at Rs 1030 per quintal from Rs 980.

However, the net benefit to farmers will be nil as they were given a bonus of Rs 50 per quintal last year over an above the MSP. The government may announce a bonus later when procurement starts in October. The government procured 33 million tonne rice last year.India’s total rice production is around 98 million tonne. The food inflation for the week-ended May 29 stood at 16.74% and the government has been devising ways to tackle it.

The Union Cabinet also approved the extension of cotton seed’s validity as an essential commodity beyond the initial period of six months by another six months from June 22, 2010, onwards.

The minister said the extension would help the government regulate production, quality and distribution of cotton seed and also curb the sale and spread of spurious varieties for another six months.


The Times of India, 11 June, 2010, http://epaper.timesofindia.com/Default/Scripting/ArticleWin.asp?From=Archive&Source=Page&Skin=ETNEW&BaseHref=ETD/2010/06/11&PageLabel=11&EntityId=Ar01100&ViewMode=HT


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