Cabinet approves enhanced MSP for Rabi Crops of 2016-17

New Delhi: The Cabinet Committee on Economic Affairs, chaired by the Prime Minister  Narendra Modi has given its approval for the increase in the Minimum Support Prices (MSPs) for all Rabi Crops of 2016-17 Season. Further, to incentivise cultivation of pulses and oilseeds, in the country Government has announced a bonus on these crops, payable over and above the following approved MSP.

The approval to increase MSPs is based on the recommendations of Commission for Agricultural Costs and Prices (CACP) which while recommending MSPs 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 on the rest of the economy, besides ensuring rational utilization of production resources like land and water.

The recommendation of CACP being the expert body, are generally accepted as such.  However, to incentivise cultivation of pulses and oilseeds, the Cabinet has decided to give a bonus of Rs.200/- per quintal for Gram, a bonus of Rs 150/- per quintal for Masur/Lentil and a bonus of Rs 100/- per quintal each for Rabi oilseeds viz. Rapeseeds/Mustards and Safflower, over and above the recommendations of the CACP. There is an increasing gap between the domestic demand and supply of pulses and oilseeds as a result of which reliance on import is increasing. Government has, therefore, announced this bonus on pulses and oilseeds to give a strong price signal to farmers to increase acreage and invest for increase in productivity of these crops. The increase in cultivation of leguminous pulses and oilseeds will also have additional environmental benefits as these crops are less water consuming and help in nitrogen fixation in the soil.

Food Corporation of India (FCI) will be the designated central nodal agency for price support operations for cereals, pulses and oilseeds. To supplement the efforts of FCI, the National Agricultural Cooperative Marketing Federation of India Limited (NAFED), National Cooperative Consumers’ Federation (NCCF), Central Warehousing Corporation (CWC) and Small Farmers Agri – Business Consortium (SFAC) may also undertake procurement of oilseeds and pulses as per their capacity.