Government Hikes MSP On Wheat Only By 2.03%

The union government today has announced the minimum support prices (MSPs) for a total of 6 rabi crops for the 2022-23 marketing season. The Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi has approved the new MSPs. The MSP for wheat got an increase of only 2.03%, the lowest in the last 12 years. Now MSP for wheat has been fixed at Rs. 2015 per quintal, than Rs. 1,975 in the last year. Earlier, in 2009-10, wheat MSP saw the lowest increase at 1.85% that translated to Rs. 1,100 per quintal, against Rs. 1,080 in 2008-09. Only in 2017-18, wheat MSP experienced a hike of 6.77%, but since then it saw low scale increases like 6.05% in 2018-19, 4.62% in 2019-20, and a major drop in increase at 2.60% in 2020-21. This year the increase rate is considerably low, amid farmers' protests across the nation.

The country's agriculture sector has been struggling with a continuous farmers' movement since the last year, against the three farm laws. The farmers are strongly demanding considerable MSP, as the distressed farmers were being unable to produce crops with very low returns. Now, this poor improvement in the MSP of wheat is not going to please these farmers, mostly from Punjab and Haryana - two states that are seeing the most intensive protests. Punjab and Haryana are two of the most important states for wheat production and procurement by the government. In the earlier rabi marketing season of 2021-22, 132.10 lakh metric tonnes (MT) wheat were procured from Punjab and 84.93 lakh MT from Haryana. Total wheat procured during this season across the nation was 433.32 lakh MT, which shows that these two states contributed a little over half of the total wheat procurement. Hence, these two states will probably show more intensified protests, they were already indulged in.

Other rabi crops like barley, gram, lentil, rapeseed, mustard, and safflower have also seen an increase of MSP in the range of only 2.14% - 8.60%. The government statement said, "The highest absolute increase in MSP over the previous year has been recommended for Lentil (Masur) and Rapeseeds and Mustard (Rs. 400 per quintal each) followed by gram (Rs. 130 per quintal). In the case of safflower, there has been an increase of Rs. 114 per quintal, in comparison to last year. The differential remuneration is aimed at encouraging crop diversification."

Economists are concerned because the agriculture sector was the only silver lining in the sinking economic growth during the pandemic; most of the other sectors suffered miserably. A little more attention towards crop productions and crop prices were expected from the union government to encourage the farmers, which the centre failed in.