Low MSP for paddy will harm food economy
In what could contribute to the skirmishes between the Opposition and the govt over the minimum support price (MSP) for paddy.
By ET Bureau |
NEW DELHI: In what could contribute to the skirmishes between the Opposition and the government over the minimum support price (MSP) for paddy, Mr T Haque, who headed the last Commission for Agricultural Costs and Prices (CACP) said the MSP of Rs 850 will affect the food economy in the long run.
The CACP headed by Mr Haque had recommended Rs 1,000 a quintal MSP for paddy. He said the argument that realisation of rice from paddy is 67% and it cannot be compared with wheat, was wrong as rice prices have historically been higher than wheat.
Mr Haque���s assertion is certain to lend muscle to the Opposition���s attack on the government over the issue. While the non-UPA governments have been using the issue to put the Centre in the anti-farmer column, the coalition partners have already sensed an image deficit for the alliance. It was this that prompted the DMK government in Tamil Nadu to hike the support price in the state to Rs 1000.
Mr Haque, who predicted a crisis situation in the food scenario, said the government would not be able to manage the situation unless price correction is done now giving benefits to the farmers so that food production is increased.
This assessment is not off the mark as farmers in states like Punjab, which produces 11% rice but provides a 37% to the national kitty, may refrain from paddy cultivation.
The government last week announced an adhoc MSP of Rs 850 a quintal for common grade paddy while referring the matter to the Prime Minister���s Economic Advisory Council (EAC). "The ad hoc increase in the MSP of paddy to Rs 850 per quintal by ignoring the recommendation of CACP of Rs 1,000 per quintal for common variety and Rs 1,050 for Grade-A is unreasonable, as historically the cost of production of both paddy and wheat are almost equal," Mr Haque said.
Mr Haque was critical of the delay in the announcement of MSPs as the sowing of the summer crops has begun in most places. "The very purpose of MSP is lost in this case because farmers have not been able to allocate their land and other resources according to any advance price signal," he said.
The argument that there has been a major hike in the MSP may not be enough to insulate the government as input costs have shot up drastically in the past few years. While the labour costs are shooting up, there is a shortage in phosphatic fertiliser.
Naturally, the Opposition is blaming administrative lapses at the Centre ��� not organising adequate and timely fertiliser imports ��� for the crisis.
If these issues are not addressed immediately, there could be more trouble for the government, which is already under stress over rising prices.
The CACP headed by Mr Haque had recommended Rs 1,000 a quintal MSP for paddy. He said the argument that realisation of rice from paddy is 67% and it cannot be compared with wheat, was wrong as rice prices have historically been higher than wheat.
Mr Haque���s assertion is certain to lend muscle to the Opposition���s attack on the government over the issue. While the non-UPA governments have been using the issue to put the Centre in the anti-farmer column, the coalition partners have already sensed an image deficit for the alliance. It was this that prompted the DMK government in Tamil Nadu to hike the support price in the state to Rs 1000.
Mr Haque, who predicted a crisis situation in the food scenario, said the government would not be able to manage the situation unless price correction is done now giving benefits to the farmers so that food production is increased.
This assessment is not off the mark as farmers in states like Punjab, which produces 11% rice but provides a 37% to the national kitty, may refrain from paddy cultivation.
The government last week announced an adhoc MSP of Rs 850 a quintal for common grade paddy while referring the matter to the Prime Minister���s Economic Advisory Council (EAC). "The ad hoc increase in the MSP of paddy to Rs 850 per quintal by ignoring the recommendation of CACP of Rs 1,000 per quintal for common variety and Rs 1,050 for Grade-A is unreasonable, as historically the cost of production of both paddy and wheat are almost equal," Mr Haque said.
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Mr Haque was critical of the delay in the announcement of MSPs as the sowing of the summer crops has begun in most places. "The very purpose of MSP is lost in this case because farmers have not been able to allocate their land and other resources according to any advance price signal," he said.
The argument that there has been a major hike in the MSP may not be enough to insulate the government as input costs have shot up drastically in the past few years. While the labour costs are shooting up, there is a shortage in phosphatic fertiliser.
Naturally, the Opposition is blaming administrative lapses at the Centre ��� not organising adequate and timely fertiliser imports ��� for the crisis.
If these issues are not addressed immediately, there could be more trouble for the government, which is already under stress over rising prices.
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