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Farmers to choose Rabi crops as per MSP

Author: Veeresh Hiremath /Wednesday, October 10, 2018/Categories: Agri & Fertiliser

Farmers to choose Rabi crops as per MSP

With the central government announcing the minimum support price (MSP) for Rabi crops before the beginning of the season, farmers are likely to select crops as per the announcement. The MSP announcement is done on the recommendation of the Commission for Agriculture Costs and Prices (CACP). While recommending MSP for crops, CACP considers the cost of cultivation.

While presenting the budget 2018-19, finance minister Arun Jaitley had proposed to fix the MSP, which would be 1.5 times of the cost of production. As proposed, the government gave its nod to the MSP recommendations made by the CACP.

Crop

Projected Cost of Production

MSP 2019-20 Marketing Season

MSP 2018-19 Marketing Season

Change over cost of production (%)

Change over Previous Year (%)

Wheat

866

1,840

1,735

112

6

Barley

860

1,440

1,410

67

2

Gram

2,637

4,620

4,400

75

5

Lentil

2,532

4,475

4,250

77

5

Mustard Seed

2,212

4,200

4,000

90

5

Safflower

3,294

4,945

4,100

50

21

 

The MSP for wheat, largest grown Rabi crop, was raised by 112 per cent of cost of production and 6 per cent over previous year to Rs 1,840 per quintal. MSP for gram, largest pulse grown in the Rabi season, was fixed at Rs 4,620 per quintal, higher by 75 per cent over cost of production and 5 per cent over the previous year. MSP for mustard seed was fixed at Rs 4,200 per quintal, almost the double of cost of production and 5 per cent higher year-on-year.

Since the MSP announcement has been made at the beginning of the Rabi season, it will help the farmers in selecting crops. As per our analysis, farmers may not show much interest in planting gram as the current market prices are below the MSP of last year. Gram acreage is expected to shift to wheat, which had shown a sharp rise in the prices. Mustard seed acreage is likely to increase despite of recent fall in the prices as efforts are being made to increase export of mustard meal and oil.

The author is DGM of Karvy Comtrade Limited

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