Many summer crops being sold below minimum support prices at mandis

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Prices of many main summer-sown crops are ruling below their minimum support prices (MSPs) at mandis in several parts of India. Kharif crops like jowar, bajra, maize, moong and soyabean were ruling at prices between 8 per cent and 38 per cent below their MSPs during the first fortnight of October.

Kharif harvesting season of these crops started over a fortnight ago. It is learnt that only arhar and urad are costlier to wholesalers than their MSPs, while the rate for paddy is closer to the MSP.

From 2018 onwards the MSPs for 14 kharif crops was fixed at 1.5 times their production costs. While the MSP hike was in the range of 4 to 52% (y-o-y) in kharif 2018, it was raised by 2 to 7% this season. Mandi prices ruling below MSPs, particularly in the harvesting period when farmers bring their crops in hordes is quite a normal phenomenon.

Even in 2018, 12 monsoon-sown crops at mandis were ruling at 7 to 43% below their benchmark rates while 11 kharif crops were 8-37% below their MSPs last year.

It is feared that selling prices of these kharif cash crops being lower than MSPs may further aggravate the farmers who have been agitating against the new farm laws, which they claim will lead to gradual abolition of MSPs. The government’s attempt to re-assure the farming community that the official procurement will stay hasn’t been very effective in quelling the protests so far.

The FCI and its nodal agencies, however, have been very aggressive in procuring paddy this season. The aggressive purchase by the government is the main reason for mandi prices of paddy ruling at MSP level. But other crops appear to have been neglected for procurement. Even though 41.67 lakh tonne of oilseeds and pulses are approved for purchase, the total procurement was only 687 tonnes comprising moong and urad from Tamil Nadu, Maharashtra and Haryana, till last week.

The government had announced an extra Budget outlay of over Rs 15,000 crore for procurement of non-National Food Security Act (NFSA) crops during the 2018-19 crop year (July-June). It had also enhanced the government guarantee for NAFED to undertake procurement of pulses and oilseeds by Rs 16,550 crore to Rs 45,450 crore.

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