Published: Чт, Июля 05, 2018
Business | By Kate Woods

Modi's bonanza to Indian farmers hampered by funds, storage

Modi's bonanza to Indian farmers hampered by funds, storage

Paddy, the main kharif crop, will see an increase of Rs. 200, a 13% hike on last year's MSP.

With an increase of Rs 525 for every quintal, taking the MSP to Rs 1,950, Bajra will now give a return of 97 per cent over the input costs estimated by the CACP.

According to a report by theHindubusinessline, the MSP of paddy has been increased by Rs 200 to Rs 1,750 per quintal, while that of Grade A variety by Rs 160 per quintal to Rs 1,750.

The Narendra Modi government on Wednesday raised the minimum support price for the common variety of paddy by what it described as a "historic" margin, seeking to address rural disquiet that the BJP has identified as one of its weaknesses in the run-up to key elections. While Modi's critics say the hike in price is too little and too late, economists and agriculturalists believe it is just a short-term solution to woo the farmers.

The Narendra Modi government has cleared a new list of minimum support price for 14 summer (kharif) crops - the biggest in its tenure that will cost the state almost Rs 15,000 crore in public funds.

In his Budget 2018 speech, then Finance Minister Arun Jaitley had announced that Niti Aayog in consultation with central and state governments will put in place a fool-proof mechanism to ensure farmers get benefit of the minimum support price. The increase, he said, will instil confidence in farmers. The hike in MSP will cost the exchequer over Rs 15,000 crore, he added. He said that the NDA government has managed to check the rate of inflation in the last four years and the rate of GDP growth has been the double the rate of inflation. The MSP of tur and urad has been raised by up to 66 per cent over their production cost. Among oilseeds, MSP of soyabean has been increased to Rs 3,399 per quintal from Rs 3,050, while that of groundnut (shell) to Rs 4,890 per quintal from Rs 4,450, sunflower seed to Rs 5,388 per quintal from Rs 4,100, Sesamum to Rs 6,249 per quintal from 5,300 and niger seed to Rs 5,877 per quintal from Rs 4,050. "Farmers were in despair and their plight was understood by the Prime Minister".

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"Higher MSPs are welcome but there is inadequate public procurement at MSP, except in the case of wheat and rice", said M.S. Swaminathan, an renowned agriculture scientist.

The Cabinet Committee on Economic Affairs (CCEA) at its meeting today approved the MSP of 14 Kharif (summer-sown) crops.

The government also said while hiking the MSP, it took into account factors such as hired human labour, bullock labour/machine labour, rent paid for leased land, expenses incurred on use of material inputs like seeds, fertilisers, manures, irrigation charges, depreciation on implements and farm miscellaneous expenses, and imputed value of family labour.

During election campaigning in 2014, Modi promised steep hikes in MSPs and the doubling of farmers' income soon after becoming prime minister. Prime Minister Modi said 41 lakh formal jobs were created from September 2017 to April 2017 as reflected in Employees' Provident Fund Organisation (EPFO) payroll data.

He said there are many factors that can lead to an increase in the rate of inflation, and to say that the hike in MSP will lead to a higher rate of inflation will not be correct.

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