Moderate hike in wheat MSP likely
The government is likely to raise the Minimum Support Price (MSP) of wheat by 5% to ₹2,400 per quintal for the 2025-26 season, considering sufficient stock and stable prices. Moderate MSP hikes for oilseeds like mustard and pulses are also expected, with a focus on improving crop productivity through better seeds and farm practices.
The government is likely to announce a 5% increase in the minimum support price (MSP) of wheat, a key rabi crop for the next marketing season 2025-26 (April-June), to Rs 2400/quintal, taking into consideration market availability and global prices of the commodity.
Sources told FE that there are several factors such as moderation in inflation along with sufficient availability of wheat stock along with softening of global prices which could have an influence on fixing the MSP.
Last year, the wheat MSP was raised by 7.05% to Rs 2,275/quintal, the sharpest increase since 2014-15 aimed at encouraging farmers to boost output. Recently food secretary Sanjeev Chopra had ruled out resumption of open market sale operations of wheat to bulk buyers from the Food Corporation of India (FCI)’s stock as there is ample wheat available in the country.
“Wheat prices are stable and there is no shortage as the country had a bumper output last year,”. The wheat output rose to a record 113.29 million tonne (MT) in 2023-24 crop year (July-June), an increase of 2.4% compared to previous year.
At present, FCI has 23.85 MT of wheat stock against the buffer of 20.52 MT for October 1. The government has allocated 2.5 MT of wheat to be sold in the market aimed at curbing rise in prices, however open market sale would resume when required, Chopra had stated.
Retail inflation in wheat in September was 6.61% and price rise has been in single digit since August, 2023.
Based on recommendation of Commission for Agricultural Costs and Prices (CACP) and inputs from the states, the cabinet will soon announce the MSP for rabi crops – wheat, mustard, chana and lentils soon prior to the commencement of sowing next month.
Sources told FE that the MSP of oilseeds – mustard may see a moderate hike as remunerative prices have increased in a range of 1.4 -1.8 times from the base year of 2017-18. Since FY19, the government had announced that MSP for various crops would be at least 1.5 times over computed cost of production.
“The MSP for oilseeds and pulses has been hiked substantially in the last few years to encourage higher production, the real issue is the need to increase productivity of these crops through better seeds and farm practices,” sources said.
An official said that productivity of most of the oilseeds have largely stagnated and there is a need to introduce high yielding climate resilient varieties and expand area. “In case of pulses, in the last couple of years there has been a significant hike in MSP and the focus would be to procure them from farmers when prices fall below MSP,” an official said.
The MSP of mustard seed, which has a share of more than 40% in the country’s edible oil production was hiked by only 3.66% to Rs 5650/quintal last year, despite the bumper output as cheaper edible imports due to virtually absence of import duties had impacted the price.
The government had to intervene in the market for procuring the Mustard at MSP from the farmers and recently the government had hiked import duty by 20% for edible oils
Among pulses, the MSP of gram, which has a share of 50% in the country’s pulses production, may also see a moderate increase like last year despite a 10% drop in pulses variety output in 2023-24 to 11.03 MT because of unfavourable climate conditions prior to harvest.
Last year, the MSP for Chan was fixed at Rs 5,440/quintal, a moderate increase of less than 2% compared to the previous year.
CACP recommends the MSPs for around 23 crops to the government. Rabi crops are sown during November and December and the produce is harvested from March depending on the maturity period of the crop.
Source Link : https://www.financialexpress.com/policy/economy-moderate-hike-in-wheat-msp-likelynbsp-3632172/
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