Cabinet Hikes Wheat MSP By 6%

The government approved a 6 percent increase in the support price of wheat a day after thousands of farmers marched to Delhi demanding a hike.

The cabinet, in a meeting chaired by Prime Minister Narendra Modi, approved a Rs 105 hike in the minimum support price of wheat to Rs 1,840 per quintal for the 2018-19 season, Agriculture Minister Radha Mohan Singh said after the meeting in New Delhi today.

Farmers marched to the national capital yesterday demanding higher prices, loan waiver and free power for irrigation. The protest had turned violent when the police deployed water canons and barricades to prevent them from entering Delhi.

“Returns from agriculture are not growing at a pace at which it should be growing,” said MJ Khan, chairman of the Indian Council of Food and Agriculture. “They saw this as an opportunity, that in the election year political climate seems to be right, and therefore they can organise a protest. It is the time they can get best assurance and best delivery by the government.”

Today, the MSP for rabi crops (October-March season) was increased according to the recommendations of Commission for Agricultural Costs and Prices. The government in the Union Budget had promised a support price that is at least 50 percent higher than the cost of production.

According to Singh, the MSP for all rabi crops is now higher than the cost of production ranging from 50-112 percent. Law Minister Ravi Shankar Prasad, who addressed the media along with Singh, said the decision will help farmers earn an additional income of Rs 62,635 crore.

According to the ministers:

• The MSP of barley has been increased by Rs 30 to Rs 1,440 per quintal.
• The support price of gram (chana) has been increased by Rs 220 to Rs 4,620 per quintal.
• Masur's MSP has been raised by Rs 225 to Rs 4,275 per quintal.
• The support price of rapeseed/mustard has been hiked by Rs 200 to Rs 4,200 per quintal.
• Safflower MSP has been increased by Rs 845 per quintal to Rs 4,945.

One of Prime Minister Narendra Modi's poll promises was to double farm income by 2020. While it makes sense to attribute the farmers' anger to the unfulfilled promises, the culprit is falling real income, according to former agriculture secretary Siraj Hussain.

“In many commodities the prices have fallen to very low levels in the last three years, primarily due to global factors, as a result of which farmers are not able to realise the price which they received three years back,” Hussain, who is now a senior fellow at the Indian Council of Research on International Economic Relations, said. “The prices have fallen to such a level that farmers are in a lot of distress. So that is I think the major reason driving the discontent.”

(With inputs from PTI)