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

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)

*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."