India Boosts Rabi Season MSP

NEW DELHI - Nov 6/15 - SNS -- India's Cabinet Committee on Economic Affairs approved Minimum Support Prices (MSPs) for Rabi Crops of 2015-16 Season, increasing support levels for all crops to be marketed in 2016.

Significantly, the government is once again offering farmers who grow pulses a bonus over recommended MSP. For the kharif crops, the bonus was set at Rs 200 per 100 kilograms. For the rabi season crops, it is Rs 75 per 100 kilograms.

The net effect is the MSP for gram or chickpea is up 10% at Rs 3500 per 100 kilograms or U.S.$537 per metric ton (MT). The MSP for masoor or lentil is Rs 3400 per 100 kilograms or U.S.$522 MT.

MSP recommendations are made by the Commission for Agricultural Costs and Prices (CACP), which takes into account the cost of production, overall demand-supply, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors, the likely effect of the Price Policy on the rest of economy, besides ensuring rational utilization of production resources like land and water.

In making the decision to increase the MSP for pulses above the levels recommended by the CACP, the cabinet statement said, "This is expected to give a strong price signal to farmers to increase acreage and invest for increase in productivity of pulses. . . . The higher MSPs would increase investment and production through assured remunerative prices to farmers."