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Government approves proposal to increase MSP of rabi crops for 2018-19
2018-09-13
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The union cabinet, chaired by Prime Minister Narendra Modi, on Wednesday approved a proposal to increase minimum support price (MSP) of rabi crops for 2018-19 season.

MSP is the price at which the government purchases crops from the farmers.

The decision will help farmers earn an additional income of Rs 62,635 crore, union law minister Ravi Shankar Prasad told reporters in New Delhi after the meeting.

The decision comes within months of announcing higher price for Kharif crops, when the government fulfilled its promise of giving farmers 50 percent more price than their cost of production.

For wheat, the cost of production is Rs 866 per quintal and MSP is Rs 1,840 per quintal, giving a return of 112.5 percent over cost of production.

Similarly for barley, the cost of production is Rs 860 per quintal and MSP is Rs 1,440 per quintal, giving a return of 67.4 percent.

MSP for gram is Rs 4,620 per quintal, giving a return of 75.2 percent and the cost of production is Rs 2,637 per quintal.

For masur, the cost of production is Rs 2,532 per quintal and MSP is Rs 4,475 per quintal, giving a return of 76.7 percent.

MSP for rapeseed and mustard is Rs 4,200 per quintal, giving a return of 89.9 percent and the cost of production is Rs 2,212 per quintal.

As per the Cabinet Committee on Economic Affairs decision, for safflower, the cost of production is Rs 3294 per quintal and MSP is Rs 4,945 per quintal, giving a return of 50.1 percent.

The MSP has been increased according to the recommendations of farm advisory body Commission for Agricultural Costs and Prices (CACP) and is in line with the government's announcement to provide farmers a 50 percent profit over the cost of production.

Reacting to cabinet's decision on MSP, Atul Chaturvedi, president, Solvent Extractors' Association of India, said, “Eight percent on mustard is definitely a welcome thing.  We have been requesting the government that the way forward as far as the nation is concerned is mustard. We need to give it a right kind of thrust, which will possibly solve all our problems of edible oil to whatever extent possible.”

Welcoming government’s decision, Siraj Chaudhry, former chairman, Cargill India, said, "I think these are all steps which are in the right direction, but will they have an impact immediately is tough to call.”

“Kharif MSP was announced very late in the season. While the rabi MSP has actually being announced fairly well in time. So, there will be an opportunity for the farmers to make their choices better than they had for the kharif crops,” he added.

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