CCEA approves hike in MSP for Kharif crops; paddy goes up to Rs 2,040 per quintal

While the Reserve Bank of India (RBI) forecast on Wednesday only that the retail inflation is likely to be 6.7 per cent, the increase in MSP is only about 5 per cent for most of the major crops. Thus, the increase in MSP is less than the rate of inflation.

The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, has approved the increase in the Minimum Support Price (MSP) for all mandated Kharif crops for Marketing Season 2022-23. The increase has been made with a view to ensuring remunerative prices to the growers for their produce and encouraging crop diversification, said a press release from the Ministry of Agriculture and Farmers Welfare.

According to the release, the increase in MSP for Kharif crops is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 50 per cent over the all-India weighted average cost of production, aiming at a reasonably fair remuneration for the farmers. It is notable that returns over MSP for bajra, tur, urad, sunflower seed, soybean and groundnut are at 85%, 60%, 59%, 56%, 53%  and 51% respectively.

However, while the Reserve Bank of India (RBI) forecast on Wednesday only that the retail inflation is likely to be 6.7 per cent, the increase in MSP is only about 5 per cent for most of the major crops. Thus, the increase in MSP is less than the rate of inflation.

The MSP of the common grade variety of paddy — the main Kharif crop — has been increased by Rs 100 to Rs 2,040 per quintal from Rs 1,940 in 2021-22. The support price of the 'A' grade variety of paddy has been hiked to Rs 2,060 per quintal from Rs 1,960.

The MSP of 14 Kharif crops has been increased in the range of Rs 92-523 per quintal. The maximum hike has been given in sesamum of Rs 523 per quintal, while the lowest Rs 92 per quintal is in the case of maize.

In the pulses category, the MSP of tur (arhar) and urad both have been increased to Rs 6,600 per quintal from Rs 6,300 last year, while that of moong raised to Rs 7,755 per quintal from Rs 7,275.

Among commercial crops, the MSP of cotton has been raised to Rs 6,080 for medium-staple variety from Rs 5,726 per quintal last year, while the MSP for long-staple variety of cotton has been increased to Rs 6,380 per quintal from Rs 6,025 per quintal.

Minimum Support Prices for all Kharif crops for Marketing Season 2022-23

(₹ per quintal)

Crop

 

 

MSP 2014-15

MSP 2021-22

 

MSP 2022-23

Cost* of production 2022-23

Increase in MSP (Absolute)

Return over cost (in per cent)

Paddy (Common)

1360

1940

 

2040

1360

100

50

Paddy (Grade A)^

1400

1960

 

2060

-

100

-

Jowar (Hybrid)

1530

2738

 

2970

1977

232

50

Jowar (Maldandi)^

1550

2758

 

2990

-

232

-

Bajra

1250

2250

 

2350

1268

100

85

Ragi

1550

3377

 

3578

2385

201

50

Maize

1310

1870

 

1962

1308

92

50

Tur (Arhar)

4350

6300

 

6600

4131

300

60

Moong

4600

7275

 

7755

5167

480

50

Urad

4350

6300

 

6600

4155

300

59

Groundnut

4000

5550

 

5850

3873

300

51

Sunflower Seed

3750

6015

 

6400

4113

385

56

Soyabean (yellow)

2560

3950

 

4300

2805

350

53

Sesamum

4600

7307

 

7830

5220

523

50

Nigerseed

3600

6930

 

7287

4858

357

50

Cotton (Medium Staple)

3750

5726

 

6080

4053

354

50

Cotton (Long Staple)^

4050

6025

 

6380

-

355

-

*Refers to cost which includes all paid-out costs 

^ Cost data are not separately compiled for Paddy (Grade A), Jowar (Maldandi) and Cotton (Long staple)

The press release says that concerted efforts have been made over the last few years to realign the MSP in favour of oilseeds, pulses and coarse cereals to encourage farmers to shift larger areas under these crops and adopt the best technologies and farm practices, to correct demand-supply imbalance.

As per 3rd Advance Estimates for 2021-22, the production of foodgrains in the country is estimated at a record 314.51 million tonnes (MT), which is higher by 3.77 MT than the production of foodgrains during 2020-21. The production during 2021-22 is higher by 23.80 MT than the previous five years’ (2016-17 to 2020-21) average production of foodgrains. 

Farmer leader Yogendra Yadav tweeted: "Of the 14 crops for which MSP has been announced, the increase in 11 is less than the inflation (forecast by the RBI). Conclusion: The government has decreased the price of crops today."