Centre hikes wheat MSP by 2% for 2021-22 crop year amid farmers' protest

By Meghna Sen
A farmer holds a handful of wheat. (via REUTERS)

The Central Government on Wednesday raised the price it will pay to buy new-season wheat from local farmers by 2% to 2,015 per 100 kg, in a move to placate protesting farmers and encourage them to step up planting.

The Centre has also hiked the minimum support price (MSP) for mustard seed by 400 to 5,050 per quintal for the current crop year in order to boost crop area as well as income of farmers.

The decision to increase the MSPs was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi today.

MSP is the rate at which the Centre buys the grain from farmers. At present, the government fixes MSPs for 23 crops grown in both kharif and rabi seasons.

Meanwhile, the farmers continue to protest at various borders of Delhi, demanding repeal of the three contentious laws and also a legal guarantee for MSP.

Sowing of rabi (winter) crops begins from next month immediately after the harvest of kharif (summer) crops. Wheat and mustard are major rabi crops.

The CCEA has approved increase in MSPs for six rabi crops for the 2021-22 crop year (July-June) and 2022-23 marketing season, an official statement said.

Wheat MSP has been increased by 40 to 2,015 per quintal for this crop year from 1,975 per quintal in the 2020-21 crop year.

The cost of production of wheat is estimated at 1,008 per quintal, the release added.

The Centre has procured a record of over 43 million tonnes of wheat during 2021-22 rabi marketing season, according to an official data.

The support price of barley has been hiked by 35 to 1,635 per quintal for the 2021-22 crop year from 1,600 per quintal in the previous year.

Among pulses, the MSP for gram has been increased by 130 to 5,230 per quintal from 5,100 per quintal while that for lentil (masur) has been hiked by 400 to 5,500 per quintal from 5,100 per quintal.

In the case of oilseeds, the government has increased the MSP for mustard seed by 400 to 5,050 per quintal for the 2021-22 crop year from 4,650 per quintal in the previous year.

The MSP for safflower has been raised by 114 to 5,441 per quintal from 5,327 per quintal.

"Government has increased the MSP of rabi crops for the 2022-23 rabi marketing season to ensure remunerative prices to the growers for their produce," the release stated.

The Centre said the increase in MSPs for of rabi crops for the 2022-23 marketing season is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the average cost of production, aiming a reasonably fair remuneration for farmers

"The expected returns to farmers over their cost of production are estimated to be highest in case of wheat and mustard seed (100 per cent each), followed by lentil (79 per cent), gram (74 per cent ); barley (60 per cent) and safflower (50 per cent)," it added.

The Centre also said that concerted efforts were made over the last few years to realign the MSPs in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift to larger area under these crops and adopt best technologies and farm practices, to correct the demand-supply imbalance.

Additionally, a central scheme -- National Mission on Edible Oils-Oil Palm (NMEO-OP) -- recently announced by the government will help in increasing the domestic production of edible oils and reduce import dependency.

With the total outlay of 11,040 crore for NMEO-OP, the scheme will not only aid in expanding area and productivity of the sector but also benefit the farmers by increasing their income and generation of additional employment, the statement read.

India, the world's second-biggest wheat consumer, sets a price each year to protect domestic farmers from distress sales and to cover emergency needs. It uses the grain to sell food to the poor at low prices.

With agency inputs

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