GoI hikes MSPs for rabi crops

New Delhi: The Union government on Monday announced higher minimum support prices (MSPs) for a range of winter-sown or rabi crops, setting them at 50% over costs of cultivation, a move aimed at allaying concerns among farmer groups that a set of farm-sector reforms undertaken by the government could weaken the MSP regime.

The decision on rabi MSPs was taken at a meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi. Agriculture minister Narendra Singh Tomar announced the hike in Lok Sabha.



The new MSP rates, announced earlier than usual, come amid widespread protests by opposition parties and farmer groups in Punjab and Haryana, after Parliament passed two key farm bills on Sunday. Earlier in the day, Prime Minister Narendra Modi, in a video address, said opponents of the farm-sector reforms were misleading farmers, saying the government would continue to buy farmers’ produce at MSP rates.



MSPs are federally fixed prices for farm produce aimed at preventing distress sale. The government buys largely rice and wheat at these prices through its procurement system.





For the upcoming winter-sown season, the highest increase in MSP was announced for lentil (a jump of Rs 300 a quintal) followed by gram and rapeseed and mustard (Rs 225 a quintal each) and safflower (Rs 112 a quintal). The Cabinet approved an increase of Rs 75 a quintal and Rs 50 a quintal for barley and wheat.



At these new MSP rates for key winter crops, farmers would get 106% return over cost of cultivation for wheat, 65% return over costs for barley, and 78% returns over cultivation costs for lentil (masoor) and gram, and 98% return over costs for mustard.



In absolute terms, wheat MSP for 2021-22 stands at Rs 1,975 a quintal, up from Rs 1,925 in the previous year. Similarly, the MSP for lentil stands at Rs 5,100, higher than Rs 4,800 during 2020-21. The MSP for mustard was hiked to Rs 4,650 from Rs 4,425 earlier.





“The differential remuneration (varying hikes in MSP) is aimed at encouraging crop diversification. This increase in MSP is in line with the recommendations of the Swaminathan Commission,” a Cabinet note said.



Earlier in the day, in a speech aimed at putting a lid on concerns of farmers’ groups, Modi said the existing agricultural state-regulated mandis (also known as agricultural produce market committees or APMCs) would continue to function. He also said the government would continue to buy farm produce at MSP rates.



“APMCs will not shut down. The new laws are not against mandis and I also want to assure the country that the government will continue to buy farm produce at minimum support prices in every (farm marketing) season,” the PM had said.





Parliament on Sunday passed The Farmers’ Produce Trade and Commerce (Promotion and Facilitation) Bill, 2020, which aims to ease all restrictions on trade of agriculture produce. The Farmers (Empowerment and Protection) Agreement on Price Assurance and Farm Services Bill, 2020, also passed on Sunday, lays down a new architecture for contract farming in the country so that agribusiness and farmers can engage with one another more confidently, enable modern supply chains and investments by agribusinesses in cultivation.



Some farmer groups want the government to write MSP into the new act.



“Our demand is to make MSP a legal right. We will continue to protest,” said VM Singh, the convener of the All-India Kisan Sangharsh Coordination Committee, a major platform of farmer organisation, which is protesting the farm-sector reforms.