Govt OKs 20% hike in gram, masur MSP

NEW DELHI: The government announced a sharp increase in price it will pay to farmers for the state purchases of winter pulses, giving a boost to their prospects just before the sowing begins.

The Cabinet Committee on Economic Affairs (CCEA) approved a near 20% increase in the minimum support price for both gram and masur for the 2010-11 rabi (winter sown) crops.

“It is a welcome boost to the production of pulses as we are facing acute shortage ,” said PK Joshi, director, National Academy of Agricultural Research and Management , Hyderabad.

India’s stagnant production compared to rising demand has caused pulses prices to rally sharply, contributing substantially to the high food inflation.

The 52-week average inflation for pulses was 21.83% for the week ended October 2, higher than the 18.62% for the entire foods category.

Comparatively, oilseeds rapeseed/mustard and winter staple wheat, however, got only a marginal hike of 1% and 1.8% respectively.

Home minister P Chidambaram said that rapeseed/ mustard prices ruled higher in the open market compared to the floor price.

Wheat floor price went up by . 20/qtl to . 1,120 against a backdrop of much higherthan-average wheat stocks with the government compared to a October 1 buffer of 110 lakh tonnes.

Storage facilities are currently extremely strained even to accommodate the summer marketing season produce.

In the four years to 2009-10 , the minimum support price for wheat rose to . 1,100/qtl (100 kilos) from . 650/quintal, a compounded average increase of 14%.

These MSPs are approved on the recommendations of Commission for Agricultural Costs and Prices (CACP).
The prices of other oilseeds belonging to the Rapeseed / Mustard group will be fixed on the basis of their normal market price differentials with Rapeseed / Mustard, a government statement said.

It also said that in the case of cereals, FCI and other designated State Agencies would continue to provide price support to the farmers, as in the past. NAFED will continue to be the nodal agency for procurement of oilseeds and pulses, and the government will reimburse any losses to these agencies. Early approval by the CCEA would allow farmers to make an informed decision on sowing, which starts by mid October.