Government Hikes Minimum Support Price For Key Kharif Crops
The Indian government has decided to increase the minimum support prices of kharif crops for the current year to provide relief to the farm sector amid disruptions caused by the Covid-19 pandemic.
After a cabinet meeting on Monday, Minister of Rural Development and Agriculture Narendra Singh Tomar said the government has decided to revise the minimum support prices for 14 kharif crops based on the formula by the commission for agricultural costs and prices. The return over cost for these 14 crops ranges from 50% to 83%, the minister said.
- MSP has been increased by 2.9% for paddy, to Rs 1,868.
- For nigerseeds, the increase in MSP was the sharpest at 12.7%.
- The hike in price was lowest for moong at 2.07%.
According to a government statement, the MSPs are at least 1.5 times the all-India weighted average cost of production, aiming at reasonably fair remuneration for the farmers. However, the differential remuneration is aimed at encouraging crop diversification, stated the release. By the projected cost of production, the highest increase in MSP is proposed for nigerseed, sesamum, urad and cotton.
The increase in MSP prices is largely on expected lines, said Siraj Hussain, visiting senior fellow at ICRIER. As announced, it is at least 50 percent over A2 plus FL costs, he added. So far, for most crops apart from paddy, procurement has been limited, Hussain said.
Extension of Repayment Date For Interest Subvention
In a another decision, the government has extended repayment date for all short-term loans to farmers of up to Rs 3 lakh from May 31 to Aug. 31.
The central government provides a 2% interest subvention to loans for farmers and a prompt repayment incentive of 3% if the farmer repays the loan in time. This enables farmers to avail loans at an interest of 4% per annum, Gangwar said. The decision to extend the deadline for repayment was taken as farmers are unable to travel to bank branches for paying their short-term crop loan dues, the minister said.