the Union government increased the minimum support price of wheat, paddy, sugarcane, mustard, rapeseed and
other agricultural commodities on October 9. The announcement was made after the Cabinet Committee on Economic Affairs, chaired by the prime
minister, accepted the recommendations on the minimum support price (msp) by the Commission of Agricultural Cost
msp of wheat was raised from Rs 850 per 100 kg (including Rs 100 as bonus) to Rs 1,000 per 100 kg. The decision came in the wake of criticism for importing wheat at Rs 1,600 per 100 kg. Not satisfied with this, wheat cultivators say msp should have been at least Rs 1,240 per 100 kg.
The Bharat Kisan Union, on October 15, sent a memorandum to the prime minister, requesting that msp be linked to the wholesale price index (wpi). "In 2005-06, msp for wheat based on wpi should have been Rs 724 per 100 kg but it was fixed at Rs 640. The loss thus incurred over the past 25 years is around Rs 20,000 crore," said Ajmer Singh Lakhowal, president of the union.
For paddy, the cabinet announced a bonus of Rs 50 per 100 kg, raising the support price for the common variety of rice to Rs 695 per 100 kg, and for grade 'A' rice to Rs 725 per 100 kg. To meet the procurement requirements for the public-distribution system, the government has banned export of non-basmati rice. This has come as a jolt to exporters who had export orders of about 1 million tonnes. The announcement has not gone down well with the farmers in the Gurdaspur-Ferozepur-Amritsar belt either. The area produces the non-basmati pusa and sarbati varieties. These were purchased from farmers at Rs 1,500-Rs 1,600 per 100 kg before the ban; the prices have gone down to Rs 1,100-1,200. Bhaskar Goswami, a member of the Forum for Biotechnology and Food Security, said farmers were being made to subsidize rice supplies to urban consumers. Pressure is building up and it is likely that export ban on non-basmati rice will soon be lifted.
The minimum support price per 100 kg for gram was increased to Rs 1,600 (from Rs 1,445) and for lentil to Rs 1,700 (from Rs 1,545). Rapeseed and mustard prices were increased to Rs 1,800 per 100 kg (from Rs 1,715 each); safflower price increased to Rs 1,650 (from Rs 1,565) and barley to Rs 650 (from Rs 565).
For the ailing sugar industry, the government extended a moratorium on cooperative sugar factories' outstanding loan repayments from two to five years. The cabinet also approved making 5 per cent blending of ethanol with petrol mandatory across the country, except in Jammu and Kashmir, the Northeast and island territories. The committee has allowed the sugar industry to produce ethanol directly from sugarcane juice to increase the availability of ethanol and reduce the over-supply of sugar.
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