Economy
First cabinet meeting of new government to declare MSP for kharif crops
Summary
- The MSP could see a substantial increase, potentially up to 8%, the first cabinet meeting of the new government.
NEW DELHI : The politically sensitive matter of minimum support price (MSP) for crops in the coming sowing season will get top billing in the new government’s agenda when it takes charge, two people aware of the development said.
“The MSP for kharif crops will be the first important decision that the next government will take in its cabinet meeting," the first person said. Kharif crops, or monsoon crops, are sown in June-July and harvested in October, barring Tur (arhar), a long-duration crop that is harvested in December-January.
The MSP could see a substantial increase, potentially up to 8%, the people cited above said.
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Exit polls predict BJP return
The development comes in the backdrop of most exit polls predicting a third consecutive term for the incumbent government with more than 350 seats for the BJP-led National Democratic Alliance (NDA). Lok Sabha election results will be announced on Tuesday.
Decisions on MSP are taken by the cabinet committee on economic affairs (CCEA), which is chaired by the Prime Minister in the second week of June every year, as the agricultural sector prepares for the sowing season with the onset of monsoon.
The MSP set by the CCEA influences farmers’ crop choices. “A timely declaration of the MSP is crucial, as it motivates farmers to plan the cultivation of specific crops for the season, ensuring better yields and economic stability," the second person said. Both persons requested not to be named.
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“In the last two years, several regions have experienced lower rainfall due to which the production of kharif crops was lower, especially rice and pulses like tur," said former agriculture secretary Siraj Hussain. “It is, therefore, possible that the government will give a handsome increase of 6-8% to incentivise the production of these crops."
When contacted, farmer leader Rakesh Tikait demanded a significant increase in the MSP for kharif crops and assurance that procurement will not fall below the fixed government rates. “Regardless of which government comes to power after the election results, it must ensure that farmers receive the MSP for their crops and are not forced to sell their produce below MSP to middlemen," Tikait said.
Queries emailed to the cabinet secretary, and spokespersons of prime minister’s office, finance ministry and agriculture ministry remained unanswered till press time.
The coming kharif season
The key crops grown during the kharif season, for which the MSP plays a crucial role in farmers’ sowing decisions, include paddy, cotton, maize, tur, moong, urad, groundnut, sunflower seed, soybean, sesame, jowar, bajra, and ragi.
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“The focus of the new government will be on increasing the sowing area of pulses and oilseeds to reduce import dependency and cut down on import bills. India faces a shortage in pulse production and is highly dependent on imports, especially for tur," the second person said.
In the 2023-24 crop year (July 2023 to June 2024), the country is expected to produce 3.3 mt of tur compared to October's forecast of 3.42 mt, and 1.5 mt of urad in Kharif alone against 1.8 mt in the previous season. India produced 2.6 mt of urad in the entire 2022-23 crop year.
The national consumption of tur is around 4.4-4.5 mt; the deficit is met by imports from Africa and Myanmar. The key challenge for the government is to balance domestic production with imports so as not to hurt farmers’ realisations.
In 2023, the MSP for moong was raised the most among all 14 kharif crops to ₹8,558 per quintal from last year’s ₹7,755 a quintal. After moong, the second-highest hike in MSP has been for sesame to ₹8,635 a quintal from ₹7,830 set for the 2022-23 kharif marketing season.
The MSP of cotton was fixed at ₹6,620 a quintal for medium staple variety and ₹7,020 per quintal for long staple variety.
The MSP for paddy (common) was fixed at ₹2,183 per quintal in 2023, against ₹2,040 per quintal in the last season, while the MSP for paddy (grade A) was fixed at ₹2,203 per quintal, up from last year’s ₹2,060 per quintal.
Other coarse cereals’ MSP was hiked by 6.3-7.8%, with that of bajra fixed at ₹2,500, up from ₹2,350 per quintal fixed in 2022-23. The MSP of maize was raised to ₹2,090 for the 2023-24 against ₹1,962 a year ago.
