Minimum support prices for summer crops in India likely to be raised by 5-20% this season

Soybean

Cotton Seed

India

Published Jun 8, 2022

Tridge summary

The government may announce higher-than-usual increases in minimum support prices (MSP) for the summer-sown crops in 2022-23, considering a sharp rise in costs of farming inputs. The MSP increases this year could roughly be in the range of 5-20%, the highest since 2018-19 when a new policy of 50% profits over computed cost of production led to MSP hikes for kharif crops in the range of 4.1-28.1%. In the last three years, MSP increases were roughly in the 1-5% range.

Original content

The sharpest MSP hikes this year have been recommended by the Commission of Agriculture Costs and Prices for oilseeds like soyabean and groundnut. Among pulses, tur and moong may also see steep hikes in support prices, as the imports of these items rose last year amid a domestic supply crunch. Higher MSPs and larger procurement by government agencies, could potentially boost rural income and purchasing power. But these could also increase inflationary pressures. Wholesale inflation in April rose to 15.08%, highest in at least 17 years. The cost of production for MSP will include all paid-out costs directly incurred by the farmer — in cash and kind — on seeds, fertilisers, pesticides, hired labour, leased-in land, fuel and irrigation and an imputed value of unpaid family labour. Rise in MSPs of commodities such as oilseeds, pulses and nutri-cereals (jowar, bajra and ragi) and cotton is also aimed at crop diversification and encourage farmers to reduce cultivation of ...

Source: Indoasiancommodities