New Delhi, June 12
Despite the Commission for Agricultural Costs and Prices (CACP) recommending a much bigger hike, the government today raised the MSP for paddy by Rs 105 to Rs 850 per quintal for 2008-09 kharif season as an “ad hoc” measure. It left it to the Prime Minister’s Economic Advisory Council (EAC) to take a final decision for increasing the MSP to Rs 1,000 as recommended by the CACP.
Announcing the decision after the meeting of the Cabinet Committee on Economic Affairs (CCEA), finance minister P. Chidambaram said this was an “ad hoc” price fixed by the government after various state governments gave conflicting recommendations on the price to be paid to the farmers.
The government had to announce an ad hoc increase in the paddy MSP as sowing had started in Kerala, Karnataka and Madhya Pradesh after the arrival of monsoon. Paddy sowing has also begun in Punjab and Haryana.
For the “A” category variety, the CACP had recommended Rs 1,050 a quintal. Last year, the paddy MSP was Rs 645 per quintal for common variety and Rs 675 a quintal for higher grade. The Centre had also offered a bonus of Rs 100 per quintal over and above the support price. This year too a bonus announcement is likely to follow shortly.
Chidambaram said the CACP recommendations had been referred to the Prime Minister’s EAC and the decision would be taken in a calibrated manner. Though he did add that farmers had been given good prices, which was reflected in production and procurement and a Rs 255 hike would be sharp rise.
Regarding today’s decision, he said this was not the first time that CACP recommendations had not been implemented in totality. “Recommendations were altered in the past as well,” he added.
The CACP, which is the advisory body on fixing the minimum support price for all crops, recommended a Rs 255 hike in the MSP from Rs 745 (645+100) a quintal for common variety paddy. For “A” variety of paddy, the recommendation was for Rs 1,050 a quintal against the present Rs 775.
The reason for this ad hoc measure, the finance minister explained, was that some states like Gujarat, Madhya Pradesh and Orissa wanted less than Rs 1,000 a quintal as MSP, while
others wanted more than that. It was in view of such divergent views that the matter was referred to the EAC, he added.
The EAC will now look at entire recommendations of the CACP, besides also the MSP for paddy.
A paltry hike, say farmers: Farmers have reacted sharply to this “paltry increase” in paddy MSP. “It seems that the government has forgotten the global crisis in foodgrains, especially rice, and resorted to extreme shortsightedness by not giving farmers their due and referring the issue to another committee. On one side they are distributing largesse to farmers by giving them loan waivers and on the other they have started another vicious cycle of debt trap,” says Bharatiya Krishak Samaj president Krishan Bir Chaudhury.
He goes on to add that the move was in fact aimed to benefit the corporate sector. “The government should increase the MSP. Who are they to ignore the CACP’s recommendations? The fact is now the MNCs will buy from farmers and export and the government will import at higher costs”.
BKU (Punjab) president Balbir Singh Rajewal, who on behalf of farmers from Punjab had given a memorandum to agriculture minister Sharad Pawar demanding an MSP of Rs 1620 per quintal, said the announcement of the ad hoc price was meant to confuse the farmers.
