The MSPs were set by the government as a long-term guarantee for producers’ investment decisions, ensuring that prices of their commodities would not fall below the level set by the government, even in the event of a bumper harvest. The procurement prices for Kharif and rabi cereals were the prices at which the grain was to be procured domestically by public bodies (such as the FCI) for release through the PDS.
It was announced shortly after the harvest started. The Centre announced the MSP for Kharif crops in June while the rabi crops recently for the year 20211-22. Minimum support prices (MSPs) for 22 mandated crops, as well as a fair and remunerative price (FRP) for sugarcane, have been announced by the government. 14 Kharif crops, 6 rabi crops, and two other commercial crops are among the prescribed crops. Furthermore, the MSPs for toria and de-husked coconut are calculated using the MSPs for rapeseed/mustard and copra, respectively.
For Kharif Crops
The Centre announced new minimum support prices for 14 Kharif (summer seeded) crops with the most popular crop paddy receiving a 72 per quintal increase from Rs 1,868 per quintal in 2020-21 to Rs 1,940 per quintal in 2021-22 marketing season. Sesamum has received the biggest absolute rise in MSP over the previous year (Rs 452 per quintal), followed by tur and urad (both Rs 300 per quintal).
However, the predicted returns to farmers above their production costs are estimated to be highest in the case of Bajra (85%), followed by urad (65%), and tur (65%). (62 per cent). Return to farmers above their cost of production is expected to be at least 50% for the remaining crops.
Compared to last year, groundnut and niger seed prices have increased by Rs 275 per quintal and Rs 235 per quintal, respectively. The increase coincides with the government’s goal of encouraging farmers to plant more coarse cereals (Nutri-cereals), oilseeds, and pulses. The raise was authorised by the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, after the Commission for Agricultural Costs and Prices (CACP) recommended it.
For Rabi crops
In order to boost output diversification, the Union Cabinet has approved an increase in minimum support prices (MSP) for rabi crops. Oilseeds, pulses, and coarse cereals have benefited from the MSPs. The government sets MSPs for 23 crops farmed in both the Kharif and rabi seasons, as is customary.
The MSP increase comes just as rabi (winter crop) sowing begins in October, following the harvest of Kharif crops. Rabi crops include wheat and mustard. The MSP for wheat has been enhanced by Rs 40 to Rs 2,015 per quintal, while the MSP for mustard seed has been increased by Rs 400 to Rs 5,050 per quintal. The MSP increase for wheat, on the other hand, is the smallest in a decade (2%). India is the world’s second-largest wheat consumer, and prices are established each year to safeguard farmers from panic selling.
According to the government, the rise in MSP for rabi crops will ensure farmers receive fair prices. “The Cabinet Committee on Economic Affairs (CCEA), chaired by Hon’ble Prime Minister Shri Narendra Modi, has approved an increase in the Minimum Support Prices (MSP) for all mandated rabi crops for the Rabi Marketing Season (RMS) 2022-23,” according to an official statement released following the MSP approval.
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