Govt hikes rabi pulses MSP by Rs 325/quintal; wheat by Rs 75/quintal

New Delhi: Faced with high prices of pulses, the government on Thursday hiked the support price to farmers for masoor and gram dals sharply by Rs 325 per quintal, including a Rs 75 per quintal bonus, to boost production in the ongoing rabi season and reduce dependence on imports.

The Cabinet Committee on Economic Affairs (CCEA) approved increase in the minimum support price (MSP) of masoor and gram dals sharply by Rs 250 per quintal each and also decided to give a bonus of Rs 75 per quintal for rabi pulses.

Including bonus, the effective support price of gram would be Rs 3,500 per quintal and masoor Rs 3,400 per quintal for the 2015-16 rabi season. Despite sharp increase in MSP, the support price is well below the open market price.

The MSP of wheat, the main rabi crop, has been increased by Rs 75 to Rs 1,525 a quintal for the 2015-16 rabi season, while that of oilseeds has been increased by Rs 250 a quintal.

"The CCEA has approved the increase in the MSP for rabi crops of 2015-16 season to be marketed in 2016-17," Power Minister Piyush Goyal said after the meeting.

The MSP of six rabi crops -- wheat, barley, gram, masoor, rapeseed-mustard seed and safflower seed -- has been increased as recommended by the government's advisory body Commission for Agriculture Costs and Prices (CACP), he said.

To boost production of pulses, the CCEA has hiked the support price of masoor dal and gram (chana) by Rs 250 a quintal each to Rs 3,325 a quintal and Rs 3,425 a quintal, respectively, for 2015-16.

"Over and above the CACP recommendation, the Union Cabinet today decided to give additional bonus of Rs 75 per quintal in the case of gram and masoor. This will give some more relief to farmers," Goyal said.

"This is expected to give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses," he added.

Wheat MSP has been increased by Rs 75 a quintal to Rs 1,525 for the 2015-16 rabi season, while barley price has been increased by Rs 75 to Rs 1,225 a quintal.

To encourage cultivation of oilseeds and cut edible oil imports, the CCEA has raised the MSP of rapeseed-mustard seed and safflower seed by Rs 250 each to Rs 3,350 a quintal and Rs 3,300 a quintal, respectively.

Sowing of rabi crops begins in October and harvesting starts from April onwards. MSP is the price at which the government would buy wheat, pulses and oilseeds from farmers. In case of other rabi crops, the government intervenes when the market price falls below the MSP.

The sharp jump in pulses MSP will encourage cultivation of pulses and reduce dependence on imports. At present, the domestic shortfall in pulses output has led to rise in retail prices of lentils to around Rs 190 a kg forcing the government to take several measures to curb price rise.

State-owned Food Corporation of India has been made the nodal agency for procurement of pulses and oilseeds. Nafed, CWC, NCCF and SFAC may also supplement the procurement operation as per their capacity.