The government has raised the minimum support price (MSP) for paddy by Rs 105 a quintal to Rs 850. The Commission for Agricultural Costs and Prices (CACP) had recommended MSP of Rs 1,000 a quintal but the cabinet said a Rs 225 hike will be “a sharp rise”.
Some state governments, including Gujarat, Madhya Pradesh and Orissa wanted a lower MSP than Rs 1,000, while Andhra Pradesh wanted the MSP at Rs 1,300 a quintal. “In view of the divergent views of state governments, the Cabinet Committee on Economic Affairs (CCEA) on Thursday referred the matter to the Prime Minister’s Economic Advisory Council for a final decision,” finance minister P Chidambaram said.
For the kharif season 2008-09, the CACP had recommended a Rs 255 hike from the present Rs 745 a quintal for the common variety paddy. For high grade ‘A’ variety, CACP suggested Rs 1,050 a quintal price against the present Rs 775.
MSP is the price at which state governments buy the crop from farmers. “Farmers have been given good prices. The Rs 255 hike would be very a sharp rise,” he said. CACP every year recommends to the government price policy on major agricultural commodities keeping in view the overall needs of the economy and interests of the producers and consumers.
The economic advisory council will have a look at the enitre CACP recommendations and not just MSP for paddy, he said adding MSP of other agriculture commodities has not been fixed yet. “The market prices are ruling much higher than what CACP has recommended. There is no urgency as far as the prices are concerned,” he said.