Cabinet approves 50% profit over input cost for rabi crops
New Delhi: A day after farmers protested for higher crop prices on the Delhi-Uttar Pradesh border, the BJP-led government on Wednesday approved MSP for rabi crops ensuring at least 50 per cent profit over production cost, including a Rs 105 hike for wheat.
The Cabinet Committee on Economic Affairs (CCEA) chaired by Prime Minister Narendra Modi approved the Minimum Support Price (MSP) for all notified winter-grown crops for 2018-19, which will ensure additional returns of Rs 62,635 crore to farmers.
The decision comes ahead of the coming Assembly elections in Madhya Pradesh, Rajasthan and Chhattisgarh, which have seen farm distress in the recent past.
In case of gram (chana), the government has increased the MSP by Rs 220 to Rs 4,620 per quintal.
While the government said that the return over the production cost is 112.5 per cent for wheat, the year-on-year hike is just 6.1 per cent. Similarly, the annual hike is 5 per cent for gram even as the return claimed by the government is 75.2 per cent.
The government has approved the MSP based on ‘A2+FL’ factor — one of the input cost fixation formula devised by the M.S. Swaminathan Commission — when the farmers have been demanding the MSP using comprehensive ‘C2’ factor.
Compared with the MSP announced last year, the assured prices for this rabi season has been increased by Rs 845 for safflower (year-on-year hike of 20.6 per cent), Rs 200 for rapeseed and mustard (5 per cent), Rs 30 for barley (2.1 per cent), Rs 225 for masur or lentil (5.1 per cent).
Addressing a press conference here, Union Agriculture Minister Radha Mohan Singh said for barley, the MSP is Rs 1,440 per quintal as against the production cost of Rs 860 per quintal, which gives a return of 67.4 per cent. It was Rs 1,410 per quintal last year.
For gram, the cost of production is Rs 2,637 per quintal whereas the new MSP is Rs 4,620 per quintal, giving a profit of 75.2 per cent.
The MSP for masur will be Rs 4,475 per quintal as against the production cost of Rs 2,532 per quintal, a profit of 76.7 per cent.
For rapeseed and mustard, the MSP is Rs 4,200 per quintal as against the production cost of Rs 2,212, a return of 89.9 per cent.
For safflower, the cost of production is Rs 3,294 per quintal whereas the MSP is Rs 4,945 per quintal, ensuring a profit of 50.1 per cent.
According to the government estimates, the target production of rabi crops is pegged at 142.50 million tonnes in 2018-19.
These crops will be harvested in March next year and be ready for procurement in April.
In the press conference, Union Law Minister Ravi Shankar Prasad said that the “historic” Cabinet decision embodies commitment of the Modi government to farmer welfare and ensuring them additional income.
The MSP announced includes all paid-out cost such as those incurred on account of hired labour, bullock and machine, rent paid for leased land, expenses on inputs like seeds, fertilisers, manures, irrigation charges, depreciation on implements and farm buildings, interest on working capital, diesel/electricity for operation of pump sets, miscellaneous expenses and imputed value of family labour.