Govt increases MSP for Kharif crops to provide relief to farmers

The government has announced an increase in the minimum support price (MSP) of kharif crops for the year 2020. This is being done to provide relief to the farm sector amid disruptions caused by COVID-19 pandemic.

Story: Shivani Sharma
Design: Pragati Srivastava

All the 17 notified kharif crops have seen their MSP being raised from a year ago. MSP for Jowar Hybrid has increased by 2.75 per cent from the previous fiscal.

The average increase in MSP has been less than 1 per cent from year ago (average MSP increase of 3.8 per cent in 2019-20). In the case of Paddy, the growth is 2.92 per cent from previous year.

The returns are expected to be the highest in case of Bajra at 83 per cent, followed by urad (64 per cent), tur (58 per cent) and maize (53 per cent). The MSP of Bajra and Maize has been raised by over 60 per cent in the last 4 years.

According to a government statement, the MSPs are at least 1.5 times the all-India weighted average cost of production, aiming at reasonably fair remuneration for the farmers. MSP for Ragi has increased 4.60 per cent, but less than previous year's growth.

The MSP of Bajra and Maize has been raised by over 60 per cent in the last 4 years, Soyabean, maize, bajra and groundnut are among the crops that could receive higher remuneration.

Moong has seen the lowest increase in MSP at 2.1 per cent (y-o-y) among other kharif crops. Last year's growth was also lowest with only 1.08 per cent increase but still has an estimated 50 per cent return over cost.

The returns are expected to be the highest in case of Bajra at 83 per cent, followed by urad (64 per cent), tur (58 per cent) and maize (53 per cent). On other hand the lowest increase in MSP has been in the case of Urad and Soyabean, by 18 per cent and 20 per cent in 5 years.

The MSP increase (y-o-y) for paddy, jowar and groundnut was the lowest in 5 years. The MSP for groundnut has increased by 3.6 per cent for  2020-2021.

The lowest increase in MSP has been in the case of Urad and Soyabean, by 18 per cent and 20 per cent in 5 years. Government has increased MSP by 4.58 per cent to Rs 3880 per quintal from 3710 last year.

Minimum support price for cotton long staple has increased by almost 5 per cent for FY21. It has just increased by only 1.83 per cent in FY20 from the previous year. The average increase in MSP in case of oil seeds has been the highest at 6.2 per cent, followed by cotton at 5 per cent. It is 4.1 per cent for cereals and 3.6 per cent in case of pulses.