Financial Daily from THE HINDU group of publications
Tuesday, Apr 16, 2002
Financial Daily from THE HINDU group of publications Tuesday, Apr 16, 2002 |
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Agri-Biz & Commodities
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Coconut & Copra Government - Agricultural Policy Govt leaves copra MSP unchanged Harish Damodaran
NEW DELHI, April 15 THE Centre has decided to leave the minimum support price (MSP) of copra for 2002-03 unchanged at the previous year's levels of Rs 3,300 per quintal for milling copra and Rs 3,550 per quintal for ball copra. A formal announcement to this effect would be made when the Cabinet Committee on Economic Affairs (CCEA) meets on Thursday, official sources said. "The Agriculture Ministry has concurred with the recommendation of the Commission for Agricultural Costs and Prices (CACP) to stick to last year's MSP," they added. The decision not to hike copra prices has been made keeping in view the fact that open market prices (currently ranging at Rs 2,650-2,700 per quintal for mill copra in Alappuzha) are ruling way below last year's MSP. Any increase in prices would only add to the losses of the National Agricultural Co-operative Marketing Federation of India (NAFED), which procures copra on behalf of the Centre under the latter's Price Support Scheme (PSS). Under the PSS, losses incurred by the co-operative are fully reimbursed by the exchequer. During the 2000-01 season, NAFED procured 2.32 lakh tonnes of milling copra worth Rs 778.18 crore. Considering that the purchases were made at the minimum support price of Rs 3,250 per quintal announced by the Government, as against open market prices of Rs 2,100-2,200 per quintal (Kerala), NAFED is estimated to have run up losses of around Rs 230 crore on these operations. The huge losses forced NAFED to curtail its copra procurement operations in 2001-02 to just 45,292 tonnes, including 34,112 tonnes of ball copra and 11,180 tonnes of boll copra. To cover up NAFED's losses under the PSS (for copra as well as other oilseeds such as mustard), the Centre had to provide Rs 185 crore as re-imbursement to the co-operative during 2001-02 (revised estimates), with a further budgetary provision of Rs 100 crore being made in the current fiscal. "With NAFED likely to procure around 5 lakh tonnes of mustardseed in the current rabi season, it is not sustainable to run huge losses on account of both mustard and copra. A freeze in the MSP for copra, therefore, makes sense in this context, particularly when the MSP for rapeseed-mustard in rabi 2002 has already been hiked by Rs 100 per quintal," the sources pointed out.
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