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Delayed paddy price could hit production

delhi Updated: Jul 27, 2008 23:51 IST
Jatin Gandhi
Jatin Gandhi
Hindustan Times
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By the time the UPA government managed to save itself from the July 22 trust vote, farmers across the country were almost done with sowing paddy. But, the government is yet to announce the Minimum Support Price (MSP) for India’s biggest staple crop. With the delay, experts say, it might have frittered away the chance to ensure a bumper crop and adequate grain stocks, as it did in the case of wheat.

The Parliamentary Standing Committee on Agriculture, which submitted its report on July 22 recommended that the MSP be announced “well before the sowing season.” The report said: “Assured and remunerative prices hold the key to stimulate and sustain farmers’ interest in producing more than their own household requirements.” Wheat MSP was announced last winter before sowing began and as a result, the government was able to procure over 50 per cent more than the target of 15 million tonnes for the country’s buffer stocks.

Highly placed sources in the Ministry of Agriculture said that the MSP announcement could take a few weeks. “I agree we missed the sowing season but now we can only prepare for the September-end when paddy is harvested,” one of the top decision-makers in the ministry said.

On June 12, the Cabinet Committee on Economic Affairs announced — for the first time — an ad hoc MSP of Rs 850 per quintal for normal paddy. The matter was referred to the PM’s Economic Advisory Council, which is yet to take a decision. Officials said that the government was worried that hiking MSP from last year’s Rs 745 per quintal to Rs 1,000 — recommended by the Commission on Agricultural Costs and Prices (CACP) to bring paddy price on par with wheat — would further push up commodity prices.