Govt may tomorrow raise wheat MSP by Rs 100 per quintal

NEW DELHI: The government may tomorrow raise the minimum support price (MSP) for wheat by Rs 100 to Rs 1,450 per quintal to encourage farmers to cover more area under the crop in the ongoing rabi season, sources said.

Wheat MSP is the rate at which government buys the grain from farmers. It is critical as it helps farmers decide the choice of crop.

"The Cabinet Committee on Economic Affairs (CCEA) is scheduled to meet tomorrow. The MSP for rabi crops, including wheat, for 2014-15 marketing year is on the agenda list," a government source said.

The Agriculture Ministry has proposed an increase of Rs 100 per quintal to Rs 1,450 per quintal in wheat MSP for the 2014-15 marketing year (April-March) from Rs 1,350 per quintal this year, the source said.

The ministry's MSP proposal on wheat is, however, higher than Rs 1,400 per quintal recommended by the government advisory body Commission for Agricultur Costs and Prices (CACP) for 2014-15.

Sources said the increase in wheat MSP is likely to lead to a rise in the government food subsidy bill in the next fiscal and may also put pressure on inflation.

The government procures wheat from farmers at MSP during April-June. Wheat is the main crop grown in the rabi (winter)season.

Wheat's sowing begins in October and harvesting starts from April onwards.

The Agriculture Ministry has also proposed an increase of Rs 120 per quintal in barley MSP to Rs 1,100 per quintal for 2014-15 marketing year.

It has suggested an hike of Rs 200 per quintal each for gram and masur to Rs 3,200 and Rs 3,100 per quintal, respectively. It has also suggested a Rs 150 per rise in mustard MSP to Rs 3,150 per quintal for 2014-15.