Cabinet Announces Meagre Increase in MSP, Paddy to Fetch Less Than 3% More
New Delhi: The Cabinet Committee on Economic Affairs on Monday announced marginal increases in the minimum support prices (MSP) for the upcoming kharif crop season. The increase in paddy (common), the most significant kharif crop, was Rs 53 per quintal, or 2.92% over last year’s MSP of Rs 1,815 per quintal to now Rs 1,868 per quintal.
“Based on the recommendation of the Commission for Agricultural Costs and Prices (CACP), the cabinet has approved MSP of 14 crops. Paddy (common) MSP has been increased to Rs 1,868 per quintal for this year," agriculture minister Narendra Singh Tomar said.
Prime Minister Narendra Modi tweeted to claim that the increase is 1.5 times the cost of production. However, as The Wire has reported in the past, the government has based the claim by taking into account the lower of two costs. The cost considered by the government is not the comprehensive cost of production (C2), which includes imputed rent and interest on owned land and capital.
Also read: Is the Agricultural Package Addressing Challenges Small Farmers Face in a Pandemic?
The Swaminathan Commission on farmers had recommended that returns to farmers be calculated based on C2 and MSP be set at 1.5 times C2. This is also what Modi had promised he would implement before being elected prime minister.
The highest rupee increase is in urad with a Rs 300 increase to take the MSP to Rs 6,000 per quintal. The highest percentage increase comes in bajra with a 7.5% increase to an MSP of Rs 2,150 per quintal. The MSP of sesamum has been increased by Rs 370 per quintal, while that of cotton has been increased by Rs 275 per quintal.
“The differential remuneration is aimed at encouraging crop diversification,” a press information bureau release said. It also said that the government has made efforts, and will continue to, to encourage farmers to move to cultivating oilseeds, pulses and coarse grains and to move away from the wheat and rice cycle in areas where the growing of these crops is adversely impacting the ground water table.
CPI(M) general secretary Sitaram Yechury criticised the minimal increase for not even keeping up with inflation.
Once again falsehood & spin. The claim is that MSP is increased by an unprecedented 50%. Truth is 👇🏾. Increase is measly, less than inflation costs. Burdens on our Annadatas will double. Modi government alone will be responsible for rising tragic distress suicides. pic.twitter.com/YlcRPoCAwG
— Sitaram Yechury (@SitaramYechury) June 1, 2020
| 2019-20 (Rs per quintal) | 2020-21 (Rs per quintal) | Difference (Rs per quintal) | Percentage increase | |
| Paddy (common) | 1,815 | 1,868 | 53 | 2.92 |
| Jowar | 2,550 | 2,620 | 70 | 2.75 |
| Bajra | 2,000 | 2,150 | 150 | 7.50 |
| Ragi | 3,150 | 3,295 | 145 | 4.60 |
| Maize | 1,760 | 1,850 | 90 | 5.11 |
| Toor | 5,800 | 6,000 | 200 | 3.45 |
| Moong | 7,050 | 7,196 | 146 | 2.07 |
| Urad | 5,700 | 6,000 | 300 | 5.26 |
| Groundnut | 5,090 | 5,275 | 185 | 3.63 |
| Soyabean | 3,710 | 3,880 | 170 | 4.58 |
| Cotton | 5,255 | 5,515 | 260 | 4.95 |
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