MSP is the rate at which the government buys the grain from farmers. Currently, the government fixes MSPs for 23 crops grown in both kharif and rabi seasons.
The world’s second biggest wheat producer, India sets a price each year to protect domestic farmers from distress sales and stock grain for emergency needs. It also uses grain to sell food to the poor at low prices.
The highest absolute increase in MSP over the previous year has been recommended for lentil and rapeseeds & mustard at Rs 400 per quintal for each followed by gram at Rs 130 per quintal.
In all, the cabinet approved MSP hike for six rabi crops for the 2021-22 crop year (July-June) and 2022-23 marketing season.
Sowing of rabi (winter) crops begins from October immediately after the harvest of kharif (summer) crops. Wheat and mustard are major rabi crops.
Last year, the MSP on wheat was raised by Rs 50 to Rs 1,975 per quintal.
In percentage terms, the hike in wheat MSP for the rabi marketing season (RMS) 2022-23 is just over 2 per cent from previous year.
As per the official release, the Centre’s cost of production of wheat for the year 2022-23 is estimated at Rs 1,008 per quintal.
The government has procured a record of over 43 million tonnes of wheat during 2021-22 rabi marketing season, as per official data.
The government said the increase in MSPs for of rabi crops for the 2022-23 marketing season is in line with the Union Budget 2018-19 announcement of fixing the MSPs at a level of at least 1.5 times of the average cost of production, aiming a reasonably fair remuneration for farmers
“The expected returns to farmers over their cost of production are estimated to be highest in case of wheat and mustard seed (100 per cent each), followed by lentil (79 per cent), gram (74 per cent); barley (60 per cent) and safflower (50 per cent),” it added.
Meanwhile, thousands of farmers who have been protesting against the three new agricultural law since a long time now have said that the MSP hike is not enough to cover the cost of cultivation, news agency Reuters reported.
(With inputs from agencies)