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Union Ministry To Provide Diesel Subsidy To Farmers

The United Progressive Allianace (UPA) government at the Centre has asked the Union Agriculture Ministry to provide diesel subsidy to farmers along with the Minimum Support Price (MSP).

Minister of State for Petroleum Jitin Prasada announcing the new method said, now the government wants to provide compensation to farmers on diesel along with the MSP.

Mr Prasada asked his ministry to consider making a provision for the increased price of diesel, while having the MSP for major crops computed so that farmers could be compensated for any increase in the price of diesel.

Factoring in the increased price of diesel in the MSP would not only insulate the agriculture sector from any price increase in respect of diesel but also strengthen the government's pricing reforms currently underway.

Mr Prasada said the Kirit Parikh report had also recommended that to protect the interests of farmers, the increase in the price of diesel could be suitably reflected in the Minimum Support Price for major crops announced by the government from time to time.

Asking Mr Pawar to refer the matter to Commission for Agricultural Costs and Prices (CACP), Mr Prasada said central government was concerned about the impact of price increase in diesel on the agriculture sector and such move would insulate the farmers from the future rise of price of the petrolium product.

Since the Centre has decided to make prices of petrol and diesel market-determined, there could be further increase in the retail prices of these products depending on the prices of crude oil in the international market. The retail price of diesel has gone up by Rs 2 per litre recently.

The current data indicates that approximately 12 per cent of the diesel consumed in the country is used in the agriculture sector mainly for energizing tractors, pump sets, other agricultural machines and implements, besides its usage being more pronounced in areas where electricity supply is erratic.

According to a preleminary observation, the agricutlure ministry would decide the rate of subsidy on the usage of irrigational facilities per hectare and its production.