Keeping its Budget promise of ensuring 1.5 times MSP for crops to farmers, the Narendra Modi government at the Centre is all set to announce the highest-ever single-year raise in the minimum support price (MSP) for paddy from this Kharif season. On Tuesday, The Indian Express cited top government sources as saying that the MSP for paddy may go up by about Rs 200 per quintal.
During the UPA years, the highest MSP hike was of Rs 155 in Financial Year 2008-09 (as per the IE report). Interestingly, the Congress-led UPA had announced this MSP raise in the election year and the move paid rich dividends for the party in the 2009 General Elections when it came back to power. Modi’s move also comes in an election year when at least five states are gearing up for Assembly polls. “At least”, because the number of polling states may increase if Modi government succeeds in getting necessary approvals for holding simultaneous elections. For now, it is certain that the Assembly polls will be followed by all important General Elections, when Modi will make another bid for Prime Ministership.
In states like Madhya Pradesh, Chhatisgarh and Rajasthan where polls will likely take place in November-December, farm distress is one of the biggest issues threatening Modi’s ruling Bharatiya Janata Party (BJP).
Since 2007-08, MSP has gone up from Rs 745 to Rs 1550 per quintal. In 2008-09, the MSP was increased from Rs 745 per quintal in the previous FY to Rs 900 per quintal (an increase of Rs 155 per quintal). Rs 100 per quintal on MSP was also raised by the UPA government in FY 2009-10. In FY 2010-11, when the UPA government started taking hit over a multitude of corruption allegations, no raise in MSP was announced. In the following three financial years till 2013-14, the then Manmohan Singh government increased MSP by Rs 80, Rs 70 and Rs 60 respectively.
Unlike 2008-09, Singh’s government didn’t go for bigbang MSP hike in the last FY of its rule (2013-14). In the years following the UPA, Modi government has raised MSP by Rs 50, Rs 50, Rs 60 and Rs 80 per quintal in FY 2014-15, 2015-16, 2016-17 and 2017-18 respectively.
Not just paddy!
If reports are to be believed, the farmers would be soon able to get around Rs 1750 per quintal MSP for paddy. IE reports that the government is also considering to raise MSP for pulses like Tur, Moong and Urad by Rs 200 per quintal for the kharif season. The MSP for moong may also go up by Rs 500 a quintal.
Rs 15000 crore!
Hindustan Times reports that the Centre is ready to spend up to Rs 15,000 crore to provide MSPs at 1.5 times of the input costs for crops including paddy, coarse grains and some pulses. The Modi Cabinet is likely to decide on this on Wednesday, when the Centre would also reveal how it plans keep up the Budget promise.
The government announces MSPs twice a year – first, at the start of the rabi (winter) and second, at the beginning of the kharif (summer) sowing seasons.
Sugarcane farmers to benefit too
Sugarcane farmers form an important voting block in all important Uttar Pradesh and several other states. Modi had ensured farmers on Saturday last that the government would ensure they get recommended MSP. Apart from this, Modi said the government is set to ensure “fair and remunerative price” for sugarcane and a decision in this regard would be announced within two weeks.
The cane season for 2018-19 will start from October. The Financial Express reported today that Modi government is considering a proposal to raise “fair and remunerative price” for cane to Rs 275 per quintal for the upcoming marketing year, from the current Rs 255 per quintal.
In the Cabinet meeting on June 6, Modi government announced Rs 8500 crore relief package for sugarcane farmers. These included several measures worth Rs 7000 crore to “improve the problem of liquidity of sugar mills resulting in accumulation of huge cane price arrears of farmers.”