Home > Agri GK, Agri-News > Wheat 2011 MSP hiked to Rs 1120 per Quintel.

Wheat 2011 MSP hiked to Rs 1120 per Quintel.

The government today approved the minimum support prices of Rabi crops for the forthcoming season. Reflecting the high current stocks, the main Rabi crop wheat got less than 2% hike in MSP, the lowest in five years.

The Cabinet Committee on Economic Affairs (CCEA) approved the MSP of Fair Average Quality (FAQ) of wheat at Rs 1,120 per 100 kg compared with Rs 1,100 in the previous season, marking an increase of just 1.82%, said the Information and Broadcasting Minister Ambika Soni, who is also spokesperson for the Cabinet.

The MSP is the price that the government pays to farmers while procuring their output. The Centre procures large quantities of wheat and rice for the public distribution system (PDS). These prices are proposed by the Commission for Agricultural Costs and Prices (CACP) based on cost of farming and a reasonable return and the centre government generally approves them without much change.

While MSP for wheat was increased marginally, the government has raised the MSP of pulses substantially to boost production and cut dependence on imports. India has been facing increasing and systematic shortage of pulses which resulted from decades of stagnant productivity and lopsided pricing.

The government is hoping to increase the pulses production to 16.5 million tonne in 2010-11 from about 14.5 million tonne in the previous year. The demand for pulses in the country hovers around 18-19 million tonne. On the other hand, lower increase in wheat MSP while reflect ample stocks of the key staple, it also signals the pressure government is facing on high food inflation, one reason of which could be traced in continuous hiking of MSP for grains.

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