MSP of Kharif Crops May Increase Soon

Key Highlights

• Expected 5-10% MSP increase for Kharif crops.
• Key crops: paddy, Tuar (Arhar dal).
• Announcement likely before June-July sowing season.
• Previous MSP hikes in 2023-24 for various crops.
• Aim: boost production, and reduce import reliance.
• MSP determined using 'A2+FL' and 'C2' costs by CACP.

The government is expected to announce an increase in the Minimum Support Price (MSP) for Kharif crops soon. This announcement could provide a significant boost to farmers as they prepare for the upcoming sowing season.

Expected Increase in MSP

The MSP is reviewed twice a year by the government: once before the sowing of Rabi crops and once before the sowing of Kharif crops. With the monsoon approaching, the central government is considering an increase in the MSP for Kharif crops. Sources suggest that the MSP for these crops could be increased by 5 to 10 percent. The Commission for Agricultural Costs and Prices (CACP) has already sent its recommendations to the government, and a decision is expected soon.

Crops Likely to See MSP Increase

According to media reports, the government is likely to increase the MSP for various Kharif crops for the 2024-25 season. The MSP for paddy is expected to rise by 5 percent, while Tuar or Arhar dal might see an 8 to 10 percent increase. This increase aims to encourage higher production of these crops. The sowing season for Kharif crops starts from June to July, and the government is expected to make the announcement before this period.

Decline in Tuar Sowing

In Maharashtra, there has been a noticeable decrease in the sowing of tur (pigeon pea) as farmers shift towards soybean cultivation. Soybean yields are significantly higher, with production at 12 quintals per hectare compared to 7 to 8 quintals per hectare for tur. The government is focused on increasing the production of pulses and oilseeds to reduce reliance on imports. Currently, 55-56 percent of the country’s edible oil demand is met through imports, and 15 percent of the pulse demand is also imported.

Previous MSP Increases

In the 2023-24 season, the government raised the MSP for various Kharif crops. The MSP for paddy increased by 7 percent or Rs 143 per quintal. Jowar saw an increase of 7 to 8 percent (Rs 210 to Rs 235 per quintal), while Bajra’s MSP rose by 6 percent (Rs 150 per quintal). Ragi’s MSP increased by 7 percent (Rs 268 per quintal), maize by 6 percent (Rs 128 per quintal), and cotton by 9 to 10 percent (Rs 540 to Rs 640 per quintal).

For pulse crops, the MSP of tur (pigeon pea) rose by 6 percent (Rs 400 per quintal), moong by 10 percent (Rs 803 per quintal), and urad dal by 5 percent (Rs 350 per quintal).

Oilseed crops also saw an increase: groundnut by 9 percent (Rs 527 per quintal), soybean by 7 percent (Rs 300 per quintal), and sunflower seeds by 6 percent (Rs 360 per quintal).

How MSP is Determined

The CACP recommends the MSP based on the 'A2+FL' and 'C2' costs. 'A2' costs include all paid expenses such as seeds, fertilizers, pesticides, labor, fuel, and irrigation. 'A2+FL' also includes the value of unpaid family labor. 'C2' costs add rent and interest on owned land and assets to 'A2+FL' costs. While the CACP calculates returns based on 'A2+FL' costs, 'C2' costs are used as a benchmark to ensure that MSPs cover these costs in major producing states. The MSP system was first introduced for wheat in 1966-67 and has since been expanded to include other food crops.

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CMV360 Says

The expected increase in MSP for Kharif crops will support farmers as they prepare for the sowing season. This move aims to boost the production of key crops like paddy and Tuar dal, encouraging farmers and reducing dependency on imports. With previous successful MSP hikes, the new government decision will likely enhance farmer’s income and promote agricultural sustainability. The announcement is eagerly awaited and holds significant importance for the agriculture sector.