M A I N   N E W S

Punjab seeks 25 pc hike in wheat, paddy MSP
Ajay Banerjee
Tribune News Service

Chandigarh, July 14
Keeping in mind the huge increase in the cost of agricultural inputs, the Punjab Government has sought an increase of nearly 25 per cent in the minimum support price (MSP) for cereal crops like wheat and paddy to make agriculture a sustainable avocation in the state.

The government has asked the Centre to peg the MSP for wheat at Rs 825 per quintal and for paddy at Rs 762 per quintal, government sources said today.

During the last crop, the MSP for wheat was Rs 650 while the Centre later announced a bonus of Rs 50 on it. The MSP for paddy was between Rs 580 and Rs 600 depending on the fair average quality of the grain.

However, market forces were at play in case of wheat procurement during April-May this year. Owing to this wheat was purchased by big companies and traders at a rate varying between Rs 700 and Rs 850 per quintal.

As a result, the Food Corporation of India (FCI) and state agencies could procure 9.25 million tonnes (mt) of wheat as against 14.79 mt in 2005, whereas the target for this year was nearly 16 mt. After the fiasco in wheat procurement, the Centre had sought the opinion of the state which has been conveyed with the demand for a hike in the MSP to attract farmers to offload their produce to government agencies.

Since wheat was purchased by private agencies it resulted in a heavy shortfall in the national foodgrain pool, forcing the Centre to order fresh import of wheat to tide over the crisis. The decision lead to criticism as the government was paying between Rs 850 and Rs 1,000 per quintal for imported wheat while it was paying much less to the local farmers.

Chief Minister Amarinder Singh had told the Planning Commission that the MSP for wheat and paddy should be linked to prevailing market price and termed the prevailing MSP as “unrealistic”. The cost of farm inputs like diesel, seed price and an overall jump in prices had made farming a loss-making proposition. Besides loss of underground water and huge costs of providing power to the farm sector were adding to the burden.

Though the government has sought an MSP of Rs 762 per quintal for paddy, the sources said the Union Agriculture Ministry might hike it by Rs 60 per quintal, taking it to Rs 650-Rs 660 per quintal. Almost all paddy crop grown in Punjab and Haryana goes to the central foodgrain pool and very little of it is purchased by private traders, who are only interested in basmati variety. As on April 1, rice stock in the central pool was 13.67 mt while the minimum buffer stock norm is 12.20 mt.