MSP Hike For Rabi Crops Announced: New Rate For Wheat Gives 100 Per Cent Returns To Farmers, Says Government

Yesterday (8 September), the Cabinet Committee on Economic Affairs decided to increase the minimum support price (MSP) for wheat for the upcoming Rabi season, a 2 per cent hike from the Rs 1,975 per quintal rate of last year.

According to the centre, the cost of production of wheat for the upcoming marketing season of 2022-23 is Rs 1,008 per quintal. Therefore, the new MSP will result in 100 per cent returns.

The government said that the MSPs have been aligned in favour of oilseeds, pulses and coarse cereals to encourage crop diversification. The government also said that concerted efforts were made over the past few years to realign the MSPs in favour of these to encourage farmers to shift to a larger area under these crops and adopt best technologies and farm practices to correct the demand-supply imbalance.

The MSP is the rate at which the government purchases crops from farmers. Currently, MSP rates are fixed for 23 crops, including six Rabi crops for which sowing will begin in October.

The new MSP rates for the six Rabi crops are as follows:

• Wheat: 2 per cent MSP hike to a rate of Rs 2,015 per quintal, with 100 per cent returns over the cost of production.

The decision comes amidst protests against the three farm reform laws brought by the government last year. The protests have been going on for ten months now. The protesters claim that the new laws will hurt the MSP regime, and have demanded a legal guarantee for MSP.

Union Agriculture Minister Narendra Singh Tomar said the decision to hike the MSP was a proof that the government was committed to the MSP system.

“Some people who are spreading the illusion that MSP will be abolished should also learn from this decision. After the passage of the new agricultural reform laws, not only have the rates of MSP increased but there has also been a continuous increase in the procurement by the government,” the Agriculture Minister was quoted as saying by The Hindu.

He said the government had decided to fix the MSPs of all Kharif and Rabi crops at least 1.5 times more than their production cost and this has helped in enhancing the farmers’ income, and added that the decision to procure pulses and oilseeds apart from wheat and paddy will benefit the farmers.

Prime Minister Narendra Modi yesterday (8 September) said in a tweet that the government had taken another big decision in the interest of farmers by increasing the MSPs of Rabi crops. He added that the MSP hike would ensure maximum remunerative price for farmers and encourage sowing operations for the upcoming cropping season.

However, the protesting farm unions under the Samyukt Kisan Morcha pointed out that the MSP hike for most crops was lower than the rate of inflation, and therefore, in real terms, the MSP for wheat had decreased by 4 per cent.

The RSS-affiliated farm union Bharatiya Kisan Sangh (BKS), which held a nationwide agitation on Wednesday (8 September), welcomed the MSP hikes, but pointed out that most farmers remain devoid of the benefits as they were unable to sell their crops at that rate.

“We welcome this attempt to diversify crops and encourage pulses and oilseeds like masoor and sarson (mustard). The water and labour costs are lower for these crops, and since the MSP has been increased, profits should be higher for farmers,” said Badrinarayan Chaudhary, general secretary of the BKS.

“Our andolan remains because the government does not procure crops from all farmers. We still want a law which will guarantee remunerative prices for all,” he said.