Rs 20 hike likely in wheat MSP

Sandwiched between the interests of consumers affected by rising food prices and farmers reeling under the drought this year....

Sandwiched between the interests of consumers affected by rising food prices and farmers reeling under the drought this year,the government is likely to hike the minimum support price MSP for wheat only marginally,by about Rs 20 a quintal. The current MSP is Rs 1,080 a quintal.

The Cabinet Committee on Economic Affairs CCEA,which is slated to meet on Thursday under the chairmanship of Prime Minister Manmohan Singh,is likely to consider a proposal to hike the MSP.

Though the hike in wheat MSP is coming just in time for the sowing of wheat crop,the meager hike proposed to the CCEA raises doubts over the governments plans to recover the losses caused to the kharif crop due to drought in the coming rabi season.

As compared to the hike of Rs 80 a quintal last year,which resulted into record wheat production,the hike proposed this year appears meager for the farmers to recover the kharif losses.

Meanwhile,Agriculture Minister Sharad Pawar told reporters that the country was aiming to raise wheat output by additional two million tonnes from last year to recover the losses in kharif output. He also said the apprehensions of agriculture growth registering a negative growth will not come true as he hoped that the late rains would help rabi crop to recover the losses in agricultural output in the kharif crop. Pawar said his ministry expects additional production of 8.5 million tonnes of foodgrain and 1.5 million tonnes of oilseeds in the rabi season this year to compensate for the loss of farm output in the summer season.

Sources in the Agriculture Ministry said the rising domestic food prices and forecasts of global wheat output this year to be above global consumption weighed down heavily against substantial hike in the wheat MSP this year.

However,the rising domestic food prices remained a concern with Pawar on Wednesday saying that any immediate respite in food prices was unlikly till the harvesting of next crop rabi early next year.

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Rising food prices is a matter of concern and the government is taking steps to arrest the increase. However,we are aware of the drought situation and we are expecting shortfall in rice output. Though we have stocks from last two years8217; record production,still there will be gap in the demand and supply of rice. The food price situation will change after the rabi crop is harvested,8221; Pawar said at the Economic Editors8217; conference in Delhi.

He said the government has allowed duty free rice import by the private traders and even the government companies to ensure domestic availability of foodgrains.

With sugar prices also ruling high in the domestic market,Pawar said that the sugar mills should be allowed to process imported raw sugar to increase the availability of sugar in the market. The suggestion comes in the backdrop of farmers in western UP protesting against sugar mills for processing imported sugar to press for their demand of higher prices for sugarcane.

Pawar said that he would be meeting the sugar mill representatives from UP soon to impress upon them to pay higher prices to farmers.