India: Wheat MSP likely to see Rs 50 rise in 2014-15

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The Commission for Agricultural Costs and Prices (CACP) had recommended a nominal increase of Rs 50 a quintal in the minimum support price (MSP) of wheat for the 2014-15 crop marketing season, which coincided with the financial year, senior officials said.

The CACP proposal will have to be approved by the agriculture department first. Thereafter, it will go to the Union Cabinet, which is expected to raise the wheat MSP from Rs 1,350 to Rs 1,400 a quintal.

Officials said CACP had also recommended a Rs 50 a quintal increase in the MSP of mustard, from Rs 3,000 to Rs 3,050. Mustard is the main oilseed crop grown during the rabi season.

In the 2013-14 crop marketing season, CACP had recommended freezing of wheat MSP at the existing level of Rs 1,285 a quintal. The Commission said the huge wheat stocks with the government did not make raising MSP a feasible option.

However, following strong opposition from various quarters, it had to review its decision. The government later fixed the wheat MSP at Rs 1,350 a quintal — an increase of Rs 65 per quintal.

Wheat stocks in government granaries is estimated to be 20.1 million tonnes as on July 1, against the requirement of 42.4 million tonnes. Total foodgrain stocks with the government (including rice) is around 74 million tonnes, against a requirement of 32 million tonnes.

Wheat is usually sown from November and the crop harvested around March. India produces 90-95 million tonnes of wheat every year, making it the second-most- produced foodgrain in the country after rice.

The government had procured around 25 million tonnes of wheat in 2012-13 crop marketing season, 10-12 million tonnes less than that procured in previous year. Usually, the government procures more wheat than the required quantity under the price support scheme.

Source: business-standard.com

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