The Hindu Business Line : Farm Ministry seeks Rs 800/qtl as wheat MSP

The Union Cabinet is to take up on Friday the Agriculture Ministry's proposal to effect an unprecedented Rs 100 a quintal increase in the minimum support price (MSP) of wheat, over and above a Rs 50 per quintal bonus.

Late announcement

If the proposal goes through, farmers in Punjab (which is slated to go in for elections early next year) and other wheat-growing States would be entitled to an effective procurement price of Rs 800 per quintal for the current year's crop, to be marketed from April next. This is inclusive of a Rs 750 per quintal MSP and a Rs 50 per quintal bonus.

Compared to this, the MSP for the 2005-06 crop was pegged at just Rs 650 per quintal. Although the Government had also declared a bonus of Rs 50 per quintal, it was announced as late as on April 21, by which time procurement operations had virtually come to an end. As result, the Food Corporation of India (FCI) and State agencies had effectively bought grain at Rs 650 per quintal, which was marginally higher than the Rs 640 per quintal paid for the 2004-05 crop.

Highest hike

The proposed Rs 150 per quintal hike would be the highest ever in history. The maximum increase previously was Rs 95 per quintal in 1996-97, inclusive of a Rs 60 per quintal bonus. Of course, it remains to be seen to what extent the Finance Ministry will agree to the proposal at the meeting. Incidentally, the CACP had recommended fixing the MSP at only Rs 700 per quintal, with an additional bonus linked to market conditions at the time of procurement.

Directive on DAP

Meanwhile, following a meeting convened by the Cabinet Secretary, Mr B.K. Chaturvedi, on Wednesday, the Railways have been asked to give priority to movement of imported di-ammonium phosphate (DAP) from the ports to the main distribution centres. This is to ensure timely availability of the fertiliser during the planting season for wheat, which is to commence soon.

Currently, an estimated 2.1 lakh tonnes of DAP are lying at Kandla port and another 2.68 lt at Mundra.

"There were no wagons to move these consignments, since the Government was so far according priority to imported wheat. But now, imported DAP has also been put on priority list, so that domestic wheat production prospects are not hampered," officials told Business Line.

DAP is required be applied right at the timer of sowing, in order to ensure that the crop develops a good stand. This is unlike urea, which is useful mainly in the plant's later growth stages.

More Stories on : Agricultural Policy | Wheat

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