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Centre hikes MSP for pulses, oilseeds

Centre also increased MSP for paddy by Rs 60 per quintal and also for commodities like cotton

Policy Pulse
Publish Date: Jun 2 2016 9:30AM | Updated Date: Jun 2 2016 12:39PM

Centre hikes MSP for pulses, oilseeds

 Met with demand-supply issues with pulses and oilseeds and to bring down dependence on imports, the government has urged farmers to target higher productivity of these commodities and hiked the Minimum Support Price (MSP) of kharif (summer) pulses and oilseeds.

Centre  also increased MSP for paddy by Rs 60 per quintal and also for commodities like cotton.
"The decision of the government to give bonus and higher MSP for pulses and oil seeds is expected to give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses and oilseeds," an agriculture ministry official said.
The government is keen to ensure increased participation of farmers towards cultivating pulses and oilseeds. 
The Cabinet Committee on Economic Affairs (CCEA) at its meeting presided over by Prime Minister Narendra Modi decided to give a "bonus, over and above the recommendations of the Commission for Agricultural Costs and Prices (CACP)" of Rs 425 per quintal for kharif pulses -- for arhar (Tur), urad and moong dals (pulses) and also for oilseeds.
Likewise, a bonus of Rs 200 per quintal for sesame and a bonus of Rs 100 per quintal for kharif oilseeds namely groundnut-in-shell, sunflower seed, soyabean, and niger seed have been also announced.
The price for the standard grade of paddy would be Rs 1,470 per quintal from the existing Rs 1,410, while minimum price for the Grade 'A' paddy has been raised to Rs 1,510 from Rs 1,450 per quintal for kharif (or summer) production.
For cotton, the MSP has been increased by 1.6 percent to Rs 3,860 for medium staple and 1.5 percent to Rs 4,160 for long staple. 
"The new prices would be effective from October 1. The higher MSPs would increase investment and production through assured remunerative prices to farmers," said Agriculture Minister Radha Mohan Singh.
However, market experts say the higher MSP including bonus in pulses and oilseeds has not motivated farmers earlier as there is "no permanent purchase mechanism". 
Generally, the prevailing market rates influence government decisions on MSPs, and thus farmers do not shift to pulses and oilseeds production replacing high yielding paddy or wheat.
The increased MSP for pulses with the bonus is for the second consecutive year. The retail prices for pulses have shot up due to acute shortage in domestic production. 
In mid-2015, the government enhanced MSP for arhar and urad by Rs 275 per quintal and for moong by Rs 250 per quintal. 
India holds a substantial share in the world oilseed market with production graph growing considerably from around 9 million tonnes in 1970s to 25 million tonnes in 1990s.