The Hindu : Front Page : Pawar rules out increase in MSP for paddy

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Thursday, Jan 31, 2008
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Pawar rules out increase in MSP for paddy

Special Correspondent

HYDERABAD: Union Agriculture Minister Sharad Pawar has virtually ruled out any further increase in the Minimum Support Price or bonus for paddy at this stage, saying it would push up the price of rice hurting the consumers.

Mr. Pawar was responding on January 16 to the two letters written by Telugu Desam president N. Chandrababu Naidu on September 19 and October 3 last year requesting for an increase. He pointed out that the price support policy for agricultural commodities not only sought to ensure remunerative price to the growers but safeguard the interest of the consumers by making available supplies at reasonable prices.

Expectedly, Mr. Naidu who showed the letter at the state committee meeting was furious at the response and said the Centre has ignored the recommendation of Swaminathan commission.

In his letter, Mr. Pawar explained that the Government announced the MSP on the basis of recommendations of the Commission for Agricultural Costs and Prices (CACP), the views of the State Governments and Central Ministries. The CACP while formulating the recommendation considered factors like cost of production covering not only paid out costs but also imputed value of owned assets including family labour for which farmers do not incur case expenses. Accordingly the price policy ensured that the MSP covered the cost of production and all these costs. The CACP has thus projected Rs. 594.63 per quintal for paddy as weighted average cost of production as against the cost of wheat at Rs. 624.46 per quintal for 2007-08. Based on this recommendation, the MSP was announced at Rs. 645 per quintal for ‘common’ paddy and Rs. 675 per quintal for Grade A paddy, he said. To enhance procurement of paddy, the Centre decided to pay incentive bonus of Rs. 50 per quintal on October 9 last year over and above MSP and an additional bonus of Rs. 50 a quintal on November 15.

With total bonus of Rs. 100 per quintal, the derived MSP for rice of common variety worked out to Rs. 1,117.50 per quintal. For Grade A variety it worked out to Rs. 1,1162.50 per quintal which was comparable to the MSP of Rs. 1,000 per quintal for wheat, he argued.

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