The MSP of wheat was Rs 1,735 per quintal in the 2017-18 crop year
New Delhi: A day after farmer protests for better crop prices rocked the national capital, the Centre on Wednesday raised minimum support prices (MSP) for winter crops to ensure farmers get 50% more than what they spend on cultivation.
While MSP for wheat, the main winter crop, was raised to ₹1,840 per quintal, a 6% increase over last year, the support price for chana (chick peas) was raised by 5% to ₹4,620 per quintal.
According to the agriculture ministry, the higher MSPs will ensure 112% returns to wheat growers, and 75% returns to those growing chana over production costs. Farmers will begin planting winter crops later this month.
“The higher MSPs (for seven winter crops) will ensure an additional income of ₹62,635 for farmers,” said union minister Ravi Shankar Prasad at a briefing, adding, “the decision embodies the commitment of the Narendra Modi government to double farm incomes.”
The decision follows repeated farmer protests since June last year, including one by tens of thousands of farmers on the Delhi border on Tuesday, and ahead of assembly elections in agriculturally important Madhya Pradesh, Rajasthan and Chhattisgarh. As low crop prices due to consecutive years of record harvests in 2016-17 and 2017-18 dented agricultural incomes, farmers have been demanding higher remunerative prices and loan waivers.
In July, the centre raised MSP for 14 kharif crops to ensure that farmers receive 50% returns over costs, in line with a promise made in this year’s budget. Last month, the centre also announced a new price support scheme PM-AASHA to ensure that farmers growing pulses and oilseeds benefit from these MSPs.
“The margins to wheat growers (over costs) remain the same as last year despite the hike in MSP, so it remains to be seen how the government is expecting over ₹60,000 crore in additional incomes to farmers,” said Ashok Gulati, agriculture chair professor at Delhi-based Indian Council for Research on International Economic Relations.
“Providing price support is not the correct way to fix farm incomes as it leads to massive inefficiencies... our rice and wheat stocks are 60% over the buffer norms while the government is saddled with large stocks of pulses it is unable to dispose of,” Gulati said, adding, “the government should provide direct income support to farmers instead of increasing the scope of price interventions.”
Among other winter crops, the centre also raised the MSP of lentils by 5.3% to ₹4,475 per quintal. The support price for mustard, a winter oilseed, was raised by 5% to ₹4,200 per quintal.
For helping growers of pulses and oilseeds through procurement at announced MSPs, the government has made a provision of ₹15,000 crore, the agriculture ministry said in a statement.
It added that the bank guarantee for government procurement agencies has been raised to ₹45,550 crore to help them procure directly for farmers.