Thursday, June 14, 2012

Hike in paddy MSP an eye-wash: Lok Satta

The Lok Satta Party today termed the hike in the minimum support price of paddy as an eye-wash since it does not take into consideration the steep increase in costs of production.

The Union Government has raised the MSP for common paddy from Rs.1080 to Rs.1250 a quintal and for A grade paddy from Rs.1110 to Rs.1280 a quintal for the 2012-13 kharif season.

In a media statement, Mr. P. Bhaskara Rao, Convener, Federation of Independent Farmers' Associations and Lok Satta Party Secretary, recalled that the Swaminathan Commission had recommended that the MSP should be at least 50 per cent more than the cost of production. The cost of production has spiraled in the last few years because of the increase in costs of inputs like seeds, fertilizers and pesticides and laborers' wages.

The Union Government decision falls far short of the commission's recommendation.

Mr. Bhaskara Rao said that the State Government had failed ensure MSP for paddy during the crop year 2011-12. It hurt the farmer further by enforcing a ban on movement of paddy and rice outside the State in contravention of laws and Central guidelines. It was only after the Lok Satta Party defied the illegal ban by launching a movement that the farmers received the MSP.

The farmers' leader demanded that the entire country be treated as one zone and the farmer given freedom to move his produce wherever there is demand.

Instead of leaving procurement to millers, the Andhra Pradesh Government should enter the market like its counterparts in Punjab and Chattisgarh.

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  1. Accepting Commission for Agriculture Costs and Prices’ suggestions for 2012-13 kharif season, the government today announced a Rs-170 hike in the support price of paddy to boost production and procurement and also counter fears of erratic monsoon in key rice producing states Karnataka, Andhra Pradesh and Chhattisgarh where elections are due this Crop Year.

    While it raised the urad’s MSP by a whopping Rs 1,000 to reduce the country's dependence on imports and move closer toward to self sufficiency, the government also affected a substantial hike in support prices of India-specific coarse grains to boost production of the nutrient-packed food grains and prompt farmers to look beyond the realms of the wheat-paddy cycle.

    The MSP of cotton (medium staple) has been raised from Rs 2,800 to Rs 3,600 and cotton (long staple) from Rs 3,300 to Rs 3,900 per quintal.

    Announcing the revisions following a CCEA meeting, Home Minister P Chidambaram said the paddy MSP for “common variety” had been increased from Rs 1,080 per quintal to Rs 1,250 per quintal while that of grade “A” variety of paddy had been fixed at Rs 1,280 per quintal, a hike of Rs 170 over the last year’s MSP. But, as expected, paddy farmers in Punjab and Haryana are not celebrating. Citing higher input costs as reasons, the Punjab government had sought at least Rs 1,750 MSP for paddy and Rs 5,000 for cotton and acceptance of Swaminathan Commission report to link MSP with the WPI.

    Official, however, insist that the paddy MSP hike is in fact “more than substantial”.

    “Last year the paddy’ MSP hike was only Rs 80. Higher MSP has been given to give better returns to farmers, whose cost of cultivation has risen substantially due to rise in cost of labour, power and fertilisers. Even though higher MSP may further trigger inflation, the hike will boost rural economy and give farmers confidence, especially when there are fears that monsoon this year may have an erratic run,” they say.

    With some key paddy producing states due for elections, sources also say higher MSP was a political necessity to provide reasons for cheer. “Higher MSP will not only cover rising input costs but also provide better returns to farmers even if monsoon is not up to the mark,” they say

    Even though the urad MSP has been increased by around 36 per cent to rest at Rs 4,300 per quintal, an increase of Rs 1,000 from last year’s MSP, decision on tur and moong were deferred following objections from the Consumer Affairs Ministry. Sources say the ministry had warned more than 10 per cent hike could lead to inflation.

    Jowar (hybrid) and ragi have been raised to Rs 1500 per quintal, an increase of Rs 520 and Rs 450 per quintal, respectively, and that of bajra and maize to Rs 1175 per quintal, an increase of Rs 195. In the oilseeds category, the support price of soyabean has been fixed at Rs 2,200 per quintal for black and Rs 2,240 for yellow varieties, up by Rs 550 per quintal each from 2011-12. Similarly, the support price of groundnut (shell) has been increased by 37 per cent to Rs 3,700 per quintal from Rs 2,700 per quintal in the previous year.