The government on Thursday announced a 16 per cent hike in minimum support price (MSP) of paddy at Rs 1,250 per quintal for the ongoing kharif season and raised the MSP of oilseeds and pulses sharply by up to 37 per cent to reduce the country's dependence on imports.
For 'A' grade variety of paddy, the support price has been raised to Rs 1,280 per quintal from Rs 1,110.
"There is a revision in the minimum support price (MSP) for 2012-13 Kharif crops. Paddy MSP has been increased from Rs 1,080 per quintal to Rs 1,250 per quintal (common variety)," Home Minister P Chidambaram said after the Cabinet Committee on Economic Affairs (CCEA) meeting.
He added that the government has accepted the suggestion made by the Commission for Agriculture Costs and Prices (CACP), which recommends MSP taking into account cost of production.
Announcing the MSP of other Kharif crops, Chidambaram said the MSP of urad has been increased by 30 per cent to Rs 4,300 per quintal for 2012-13 crop year (July-June), against Rs 3,300 per quintal previous year. The decision on MSPs of key pulses - Tur and Moong - were deferred.
In the oilseeds category, the support price of soyabean has been fixed at Rs 2,200 per quintal for black and Rs 2,240 for yellow varieties, up by Rs 550/quintal each from 2011-12.
Similarly, the support price of groundnut (shell) has been increased by 37 per cent to Rs 3,700 per quintal from Rs 2,700 per quintal in the previous year.
The CACP has suggested sharp increase in MSP of pulses and oilseeds to boost domestic output and reduce the country's import bill. Higher MSP has been fixed not only to cover rising input costs but also provide better returns to farmers.
The MSP of cotton increased by up to 28 per cent to Rs 3,600 and 3,900 per quintal for medium and long staple, each.