Centre may crop kharif MSP, open field for cane & pulses

NEW DELHI: The Centre is likely to start a new regime of frozen or nominally-higher support prices for rice and wheat while sugarcane, oilseeds and pulses may get higher prices in a bid to balance the lopsided crop economy that has seen high support prices for rice and wheat in the last five years even as the those of sugarcane, among others, remained stagnant.

The minimum support prices, or MSP, for pulses are likely to be increased as the food ministry may put the commodity on the public distribution system (PDS) to boost protein intake of the needy. In fact, the Centre has yet to announce kharif support prices despite key sowing season July virtually next door.

The Centre must announce the MSP for kharif crops well before the sowing season in June to allow the farmer to make an informed and remunerative choice. However, the farm ministry received MSP recommendations from the Commission for Agricultural Costs and Prices (CACP) only towards May end.

Not surprisingly, this has put paid to demands from a plethora of farm organisations that the government mandatorily announce support prices at least a month before the sowing season, which begins in early June and continues into July, the key sowing month.

���Recommendations from the CACP could not be entertained in early May or April since general elections were on,��� a senior farm ministry official told ET. The CACP usually submits its recommendations by March, or latest by April.
The high MSP has led to record wheat and rice crops for two successive years, making the government storage houses overflow. Currently, food stocks with the government are about 50 million tonnes, more than twice the storage capacity of the Food Corporation of India, on the back of a 19% higher rice procurement ��� 288.18 lakh tonnes up to May 18 ��� and a record wheat buy ��� over 221 lakh tonnes.

On the flip side, sugar prices in the domestic market have shot up to a phenomenal high of almost Rs 30 per kg, forcing the government to ban futures trade and exports even while releasing record quantities of the commodity in the open market to cool down prices. In turn, that spells high-priced imports over the 2009-10 sugar year, fed by India���s thirst for the sweetener, something that is expected to impact the farm and overall economy significantly at a time of economic downturn.

Sugarcane usually usurps wheat area in states such as Uttar Pradesh, the country���s largest wheat producer and a key sugar producer. ���We may have to chalk out a regime where the MSP for staple crops such as rice (in kharif) and wheat (domestic prices are currently higher than the global price, making it unviable to export without subsidies) come in for only nominal increases compared to other essential crops where we are heavily dependent on imports or will be, such as pulses, oilseeds and sugarcane,��� the official said.