Bhubaneswar: The state government has welcomed the Centre's decision to increase the minimum support price (MSP) of paddy, but with some reservations.

It demands that the cost of production needs to be assessed on realistic basis for fixing the MSP. The lower MSP has also hit the economy of the farmers. Odisha stands at the 16th place in the list of states in terms of average income of farmers.

Finance minister Sashi Bhusan Behera said: "We are happy that the Centre has announced it in the union budget of 2018-19 to enhance the MSP to one-and-a-half times the cost of production. We welcome the step."

He further said: "However, we demand that the cost of production needs to be assessed on realistic basis for fixing the MSP. Further, we urge the Centre to devise credible mechanism for ensuring the MSP for various crop."

Earlier, the Assembly has unanimously adopted a resolution for increasing the MSP to Rs 2,930 per quintal.

"The Centre announced to enhance the MSP, but there were many discrepancies noticed in it. The Centre should come out clear whether it would meet the state's demand," said BJD spokesperson Samir Ranjan Dash.

The state is demanding for hike in the MSP on paddy to Rs 2,930 per quintal against the existing price of Rs 1,559 per quintal. However, the Centre has fixed Rs 1,656 per quintal of paddy.

Agriculture minister Pradeep Mharathy said: "To finalise the cost of production per quintal of paddy, we take the help of the Odisha University of Agriculture and Technology. Based on their assessment, we send the report on the cost of production of 1kg of paddy."

Maharathy said: "In order to finalise the MSP, the Centre has taken demand and supply of product, cost of production of the product, price trends in the market, inter-crop of price parity, terms of trade between agriculture and non-agriculture and likely implications of the MSP on the consumers of that product."