Govt hikes MSP for paddy, pulses as sowing ends

New Delhi, Aug 20 (PTI) Apprehending shortfall in rice
procurement due to monsoon failure, the government on Thursday
increased the minimum price paid to farmers for paddy by Rs
100 a quintal and that for pulses by up to Rs 240 a quintal.

The move is aimed at supporting farmers and encourage
them to sell their produce to official agencies, but would
lead to higher prices for consumers who are shelling out over
40 per cent more for pulses than they did in June.

The MSP for common variety of paddy has been hiked to Rs
950 from Rs 850 per quintal and for the A-grade to Rs 980 from
Rs 880 per quintal for 2009-10 season.

The decision to increase the support prices for paddy,
toor, moong and sesame was taken by the Cabinet Committee on
Economic Affairs, chaired by Prime Minister of India Manmohan
Singh.

The MSP for toor has been increased to Rs 2,300 from Rs
2,000 per quintal, moong to Rs 2,760 from Rs 2,520 per quintal
and sesame to Rs 2,850 from Rs 2,750 to Rs 2,850 per quintal.

"Last year was the record procurement. I am sure farmers
will offer surplus paddy for procurement this year," Home
Minister of India P Chidambaram told reporters after the CCEA
meeting.

In 2008-09 season (October-September), the government has
so far procured about 325 lakh tonnes of rice, which is coming
handy to overcome the shortfall in production of rice now.

However, the MSP, generally announced before sowing time,
is late this season and won't make much difference in terms of
increase in acreage. The only intention for hiking MSP seems
to be to induce farmers to sell their produce to government
agencies, an analyst said.

With over one-third of the country's districts having
been declared drought affected, the rice production is likely
to drop by 10 million tonnes in the current Kharif season.
"This shortfall in monsoon may result in shortfall in
area coverage of paddy by about 5.7 million hectares compared
to last year and production of rice may be reduced by 10
million tonnes," Agriculture Minister of India Sharad Pawar
had said on Wednesday.

Chidambaram said the government is offering an attractive
MSP and "let's see how production and procurement (of paddy)
takes place," the Home Minister said.

The Kharif sowing runs from June to September.

Asked about what the government was doing to contain the
sharp rise in prices of essential food items, Chidambaram said
the states should impose stock limits which should be followed
dehoarding operations.

"Stock limit must be imposed...Infact, dehoarding
follows stock limit," he said.

Chidambaram said the Centre had declared its intentions
last week at the Chief Ministers Conference here for taking
steps to mitigate the impact of drought. "Already steps are
being taken," he said.

He said that the government has enough foodgrain stocks
to take care for 13 months. PTI LUX
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