Wheat MSP raised by 4.6%, but it’s lower than this year’s hike

Minimum support price for wheat would now stand at ~1,925 per quintal

Saddled with bulging stocks and rising economic cost, the Cabinet on Wednesday increased the minimum support price (MSP) of wheat for the 2020-21 rabi marketing season by 4.61 per cent to ~1,925 a quintal, lowest in the last five years.

In the current wheat marketing season that will end in March 2020, MSP was increased by 6.1 per cent as compared to the 2018-19 season.

The average weighted cost of production of wheat for the 2020-21 season has been estimated at ~923 a quintal. This is up ~57 from the current season’s average weighted cost of production.

The government claimed that the new MSP was 109 per cent more than the average weighted cost of production, thus keeping its promise of providing MSP which is 50 per cent more than A2+FL cost of production.

The support price of mustard, the main oilseed grown during the rabi season, was fixed at ~4,425 a quintal, an increase of 5.35 per cent from the current (2019-20) marketing season.

Chana (the biggest pulses grown during the rabi season) was fixed at ~4,875 a quintal, up 5.51 per cent, compared to the 2019-20 MSP.

“The hike in wheat MSP is very little and it should have been a minimum 10 per cent more than last year as production cost of several items have risen sharply. According to our calculations, the MSP of wheat for 2020-21 should be at least ~2,000 a quintal,” said farmers’ leader Pushpendra Singh, head of the Kisan Shakti Sangh.

Wheat stocks in the central pool as on October 1 was estimated to be 39.31 million tonnes, almost 92 per cent more than the buffer stock norms for the same period. Meanwhile, the data showed that MSP of barley has also been increased by ~85 to ~1,525 per quintal from ~1,440 per quintal last year, a rise of 5.9 per cent.

Also, to encourage the cultivation of pulses, the support price of masur has been increased by ~325 to ~4,800 per quintal from ~4,475 per quintal last year. The minimum support price for safflower has been hiked by ~270 to ~5,215 per quintal from ~4,945 last year.

The MSP for rabi crops announced this year is in line with the recommendations of the government’s farm price advisory body — Commission for Agricultural Costs and Prices or CACP.

Wheat is the main rabi crop, sowing, of which will begin next month. The crop will be marketed from next April.

“I think more than a significant increase in MSP, what is more needed is that MSP should be available to more farmers,” said Tajmul Haque, former chairman of CACP and a noted agriculture economist.

He said as of now wheat is procured largely from Punjab, Haryana, western UP, and MP only while farmers in western and eastern parts of the country are completely untouched by the MSP regime, be it paddy or wheat.

“Instead of hiking MSPS, the government should increase the payouts under Pm-kisan as that would benefit more farmers,” Haque added.

Terming it a "mere cosmetic" measure that only paid "lip service" to the needs of the farmers, Punjab Chief Minister Amarinder Singh said the hike is "insufficient" to provide even interim relief to the beleaguered farming community, leave alone addressing their long-term concerns.