New Delhi, Oct. 17: The government today increased the minimum support price (MSP) of wheat by Rs 50 to Rs 1,400 per quintal (per 100 kg) to encourage farmers to bring more area under the crop in the ongoing rabi season.
The hike follows a recommendation of the Commission for Agriculture Costs and Prices but is lower than the amount proposed by the agriculture ministry because of inflationary concerns. Wholesale food price inflation stood at over 18 per cent in September.
On the marginal rise in the procurement price, food minister K.V. Thomas said, “We are concerned about inflation and we can control prices of foodgrains, which we procure.”
The agriculture ministry had proposed a hike of Rs 100 per quintal to Rs 1,450 per quintal in wheat MSP for the 2014-15 marketing year (April-March).
Wheat MSP stood at Rs 1,350 per quintal in 2012-13 crop year.
The hike is likely to inflate the government’s food subsidy bill in the next financial year and may also put pressure on inflation.
The cabinet committee on economic affairs (CCEA) has also approved the MSP of other rabi, or winter, crops for 2013-14 crop year (July-June) to be marketed in 2014-15.
Wheat is usually sown from October and harvested around March-April. India produces 90-95 million tonnes of wheat every year.
MSP is the rate at which the government buys foodgrains from farmers.