In its first Cabinet meeting after assuming the third consecutive term, the Modi Government 3.0 on Wednesday raised the minimum support price (MSP) for paddy by 5.35 per cent to Rs 2,300 per quintal for the 2024-25 kharif marketing season. 

The MSP for 'common' grade paddy has been raised Rs 117 to Rs 2,300 per quintal, while for the 'A' grade variety it has been hiked to Rs 2,320 per quintal for the upcoming Kharif season. The highest absolute increase in MSP over the previous year has been recommended for oilseeds and pulses viz nigerseed (Rs 983/- per quintal) followed by sesamum (Rs 632/- per quintal) and tur/arhar (Rs 550/- per quintal).

The Union Cabinet has increased the MSP for all 14 crops, including paddy, ragi, bajra, jowar, maize and cotton which will have a financial implication of Rs two lakh crore for the Government and entail gain of Rs 35,000 crore to farmers over the previous season. Announcing the MSP increase, Information and Broadcasting Minister Ashwini Vaishnaw said the Cabinet has approved the minimum support prices for 14 Kharif (summer) crops based on recommendations from the Commission for Agricultural Costs and Prices (CACP). The MSP for Jowar has been increased by Rs 191 per quintal from Rs 3,180 to Rs 3,371 per quintal. The MSP for Bajra has been increased to 125 per quintal from Rs 2,500 to Rs 2,625 per quintal; Ragi by 444 from Rs 3,846 to Rs 4,290 per quintal and Maize by Rs 135 from Rs 2,090 to Rs 2,225 per quintal. 

The MSP for tur/arhar also increased by Rs 550 from Rs 7,000 to 7,550 per quintal; Moong by 124 from Rs 8,558 per quintal to Rs 8,682 per quintal; Urad by Rs 450 from Rs  6,950 to Rs 7,400; Groundnut by Rs 406 from Rs 6,377 to 6,783 per quintal and Sunflower Seed by Rs 520 from Rs 6,760 to Rs 7,280 per quintal.

The hike in paddy support price comes despite the Government sitting on surplus rice stocks, but it is significant ahead of elections in states like Haryana, Maharashtra, Jharkhand, and Delhi.

“The increase in MSP for Kharif crops for marketing season 2024-25 is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times of the all-India weighted average cost of production, The expected margin to farmers over their cost of production are estimated to be highest in case of bajra (77per cent) followed by tur (59 per cent), maize (54 per cent) and urad (52 per cent). For rest of the crops, margin to farmers over their cost of production is estimated to be at 50 per cent,” the Ministry of Agriculture said in a statement. Vaishnaw said the Government had a clear policy decision taken in the 2018 Union Budget that MSP should be at least 1.5 times the cost of production, and this principle was followed in the latest MSP hike. The cost was scientifically calculated by CACP, he added.

The Food Corporation of India currently holds a record stockpile of around 53.4 million tonnes of rice, which is four times the required buffer for July 1 and sufficient to meet demand under welfare schemes for one year without any fresh procurement.

The MSP was a major issue for farmers’ protests which impacted the seats in Punjab, Western UP and Haryana in the Lok Sabha polls.

Minimum Support Price (MSP) is the lowest rate at which government procurement agencies buy crops from farmers. It shields farmers from market fluctuations, offering stability and income security. MSP is crucial for ensuring fair prices for farmers and is determined by the Commission for Agricultural Costs and Prices (CACP), considering factors like production costs, market trends, and demand-supply dynamics. After the CACP submits its recommendations, the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister of India, makes the final decision on MSP levels.

Despite lower rainfall of about 20 per cent across the country since the start of the monsoon season on June 1, weather conditions are now favourable for further advancement of the rains, according to the meteorological department.

As per the 3rd Advance Estimates of production for 2023-24, total foodgrain production in the country is estimated at 3288.6 Lakhs Metric Ton (LMT), and oilseeds production is touching 395.9 LMT. During 2023-24, kharif production of rice, pulses, oilseeds and nutri-cereals/Shree Anna and cotton is estimated to be 1143.7 LMT, 68.6 LMT, 241.2 LMT, 130.3 LMT and 325.2 Lakh bales, respectively.

The Union Cabinet has also approved a Rs 2,869.65 crore proposal for the expansion of Lal Bahadur Shastri International Airport at Varanasi. Addressing media after the cabinet meeting, Union Information and Broadcasting Minister Ashwini Vaishnaw said the development of the airport at Varanasi, which is the Lok Sabha constituency of Prime Minister Narendra Modi, includes the construction of new terminal building, extension of apron and runway, parallel taxi track and other allied works. The proposal of the Airports Authority of India (AAI), with an estimated financial outgo of Rs 2,869.65 crore, is aimed at enhancing the passenger handling capacity of the airport to 9.9 million passengers per annum (MPPA) from the existing 3.9 MPPA. The Union Cabinet also approved the ‘Development of an all-Weather Greenfield deepdraft Major Port at Vadhavan in Maharashtra’. On completion, the port which will be built at a cost of Rs 76,200 crore, will be one of the top 10 ports in the world.