Union Cabinet gives go-ahead to increase MSP of 14 kharif crops

• The Union Cabinet gave its nod to raise the minimum support price for paddy by per quintal for the upcoming 2024-25 kharif marketing season.

Highlights:

• The Cabinet approved MSP hikes for all 14 kharif season crops, in alignment with the government’s “clear policy” of keeping MSPs at least 1.5 times above the cost of production as calculated by the government
• However, only four of these crops have MSPs that will provide farmers with a margin of more than 50% above their production costs: bajra (77%), followed by arhar dal (59%), maize (54%), and black gram (52%).
• RBI annual report 2023-2024: MSPs for kharif and rabi crops ensured minimum return of 50% over cost of production
• Paddy, the season’s key crop, will see an MSP increase of ₹117 per quintal, which will allow farmers a margin of exactly 50%.
• Kharif sowing usually begins in June with the onset of the southwest monsoon, while the crop marketing season will run from October 2024 to September 2025.
• This year’s MSP hike is likely to result in a total financial implication of ₹2 lakh crore, about ₹35,000 crore higher than the previous season,
• The highest absolute increase over the previous year has been recommended for oilseeds and pulses.

Prelims Takeaway

• MSP
• RBI annual report