Thursday, June 2, 2016

Union Cabinet nod to raising minimum support price of pulses

Centre's finger on pulses cartel

To boost the production of pulses and oilseeds, the Centre on Wednesday announced massive increases in the minimum support prices (MSP) of kharif pulses and oilseeds, but kept it nominal for paddy.

However, the previous experience with MSP hikes in pulses and oilseeds have shown that in the absence of a permanent purchase mechanism and with market rates ruling 72 per cent above the prevailing MSPs, the increases have limited impact on farmers to shift acreage.

Also, in areas where paddy is grown, pulses and oilseeds are not preferred, which also stops any large-scale transition. But, with the Centre deciding to purchase pulses regularly to build a buffer, this might change in the coming years.

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According to the Cabinet decision, the MSP of tur or arhar was increased by Rs 425 a quintal, which also included a bonus of Rs 200, while that of moong and urad was increased by Rs 375 a quintal each. After the increase, the MSP of tur will be Rs 5,050 a quintal, while that of moong and urad will be Rs 5,225 and Rs 5,000 a quintal, respectively.

The MSP of paddy, biggest foodgrain grown during the kharif season, was increased by a nominal 4.3 per cent for the common varieties, while it was increased 4.1 per cent for Grade ‘A’ varieties.

Among oilseeds, the MSP of groundnut was increased by Rs 190 a quintal to Rs 4,220 a quintal, while that of soyabean (yellow) was raised by Rs 175 a quintal to Rs 2,775.

The support price of sunflower seed was increased by Rs 150 to Rs 3,950 a quintal, while that of niger seed was raised by Rs 175 to Rs 3,650 a quintal. The MSP of sesame seed was raised by Rs 300 to Rs 5,000 a quintal. The MSP of long staple cotton will now be Rs 4,160 a quintal, around Rs 60 more than the current rate.

“The Food Corporation of India will be the designated central nodal agency for price support operations for cereals, pulses and oilseeds. The Cotton Corporation of India will be the central nodal agency for undertaking price support operations for cotton,” an official statement released after the Cabinet meeting said.

Talking to Business Standard, Sudhir Panwar, member of Uttar Pradesh Planning Commission and president of Kisan Jagriti Manch, said: “To me, these hefty increases in MSP of pulses and oilseeds only have a nominal value and will not have much overall impact on farmers; in crops where MSP is predominant like paddy, there has been a nominal increase, while in crops where it is not prevalent like pulses and oilseeds, the government has announced big increases.”

In a related development, the Union Cabinet also approved two proposals for Tamil Nadu just days before Chief Minister and All India Anna Dravida Munnetra Kazhagam (AIADMK) leader J Jayalalithaa’s proposed visit to Delhi.

These include allocation of extra foodgrains to the state and approval of extension of the Phase-I of the Chennai Metro Rail project, a long-standing demand. According to sources, these measures are meant to keep her happy so that she does not actively obstruct the goods and services tax (GST) constitutional amendment Bill in the Rajya Sabha in the monsoon session.

Out of 18 MPs from Tamil Nadu in the Rajya Sabha, 16 are opposing GST. The Centre badly needs Tamil Nadu’s cooperation to pass the Bill. The opposition to GST is being mounted both by the AIADMK and its rival, the Dravida Munnetra Kazhagam.

If Delhi can give some sort of assurance to AIADMK, which has 12 MPs in the Upper House, it will have succeeded in neutralising a part of the opposition.

Source : Business Std

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