The Cabinet Committee on Economic Affairs has approved the increase in the Minimum Support Prices (MSP) for all mandated Rabi Crops for Marketing Season 2023-24. (Rabi is harvested from Feb – June each year.)
Government has increased the MSP of Rabi Crops to ensure that farmers get good prices for their produce.
The absolute highest increase in MSP has been approved for lentil (Masur) at Rs.500/- per quintal followed by rapeseed and mustard at Rs.400/- per quintal.
For safflower, an increase of Rs.209/- per quintal has been approved.
For wheat, gram, and barley an increase of Rs.110/- per quintal, Rs.100 per quintal respectively has been approved.
Why are prices announced so early?
The Rabi crop is about to be sown/is being sowed. This is a gentle nudge by the government to encourage farmers to grow crops that will ensure food security for India. For instance, oilseeds like rapeseed, safflower, mustard etc. have been calculated to have a high cost of production and then a high margin on top of that. So, the farmer will make a high profit per quintal of this crop.
As you are aware, India has been exporting about 70% of its cooking oil for many years now and the price of cooking oil in India has more than trebled in the last 5 years.
Likewise, the Kharif prices for 2022-23 were also announced in June, during sowing time.
By how much have the prices really increased?
We made this table to do some preliminary analysis. Prices are MSP per quintal.
Considering that inflation is generally at 6%, this MSP price hike is just enough to match the inflation rate.
An increase of 100 rs per quintal means an increase of just 1 re per kilo. So, growers of paddy, bajra, wheat, barley, and gram will get this price rise over the previous year.