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Business Standard
28-05-2025
- Business
- Business Standard
Cabinet hikes paddy MSP by 3%, pulses and oilseeds see bigger increase
With the Food Corporation of India (FCI) sitting on huge stockpiles of rice, the Union Cabinet on Wednesday hiked the minimum support price (MSP) of paddy for the 2025-26 marketing season by a modest 3 per cent, the lowest in the last five years. At the same time, the Centre raised the support prices of pulses and oilseeds by a higher percentage compared to the 2024-25 season. The 2025-26 marketing season starts from July 2025. During the 2024-25 season, the MSP of paddy was raised by 5.3 per cent compared to the year-ago period. Since the last many years, the MSPs of oilseeds and pulses have been increased more in proportion to cereals to encourage farmers to switch towards them. The MSP of tur was raised by 6 per cent to ₹8,000 for 2025-26 while urad has been hiked by 5.4 per cent to ₹7,800. The FCI has been sitting on a huge stockpile of rice, estimated at around 60 million tonnes as on April 30, 2025 (includes unmilled paddy lying with millers) against the April 1 buffer requirement of 13.58 million tonnes. Wheat stocks during the same period were pegged at 35.67 million tonnes against an April 1 buffer requirement of 7.46 million tonnes. Among the crops whose MSP was raised the most in percentage terms during kharif 2025-26 compared to the same period this year was ragi. Its MSP was hiked by almost 14 per cent to ₹4,886 per quintal. Last year, too, in kharif 2024-25, MSP of ragi was raised by a steep 11.5 per cent. Ragi is a major crop in the whole 'Sri Anna' complex. 'The hike in MSP of most-cultivated paddy crop is only 3 per cent which is lower than inflation and hike in input cost. The MSP increase of other crops is only for symbolic value without purchase arrangement,' said professor Sudhir Panwar, a former member of the Uttar Pradesh Planning Commission. Meanwhile, the Cabinet's announcement comes amid the southwest monsoon reaching its destination earlier than usual. This is giving a boost to the sowing of kharif crops, which contribute over 50 per cent of India's total annual foodgrain production. 'In the last 10-11 years, there has been a 'massive' increase in the support price of 14 kharif crops in line with the recommendations of the Commission for Agricultural Costs and Prices,' Union Information and Broadcasting Minister Ashwini Vaishnaw said while announcing the decisions of the Cabinet. Among other crops, the MSP of sunflower seeds has been raised by 6.1 per cent in the 2025-26 kharif marketing season to ₹7,721 per quintal while for sesame seeds, it has been hiked by 6.2 per cent to ₹9,846. For nigerseed, the hike was by 9.4 per cent to ₹9,537 for 2025-26. Among cash crops, cotton MSP has been increased by 8.3 per cent to ₹7,710 (medium staple) and by 7.8 per cent to ₹8,110 (long staple), respectively, for 2025-26. The increase in 2025-26 kharif crop MSP is in line with the Union Budget 2018-19 announcement of fixing the MSP at a level of at least 1.5 times the all-India weighted average cost of production. The expected margin to farmers over their cost of production is estimated to be highest in the case of bajra (63 per cent), followed by maize (59 per cent), tur (59 per cent) and urad (53 per cent). For the remaining crops, the margin to farmers is estimated to be at 50 per cent, the minister added. The highest absolute increase in MSP over the previous year has been recommended for nigerseed, followed by ragi, cotton, and sesamum. Crop loans: The Cabinet also approved continuation of the Modified Interest Subvention Scheme (MISS) for 2025-26 under which farmers get short-term credit at affordable rates through their Kisan Credit Cards (KCC). Continuation of the scheme will cost the exchequer ₹15,640 crore. Under the MISS, farmers get short-term loans of up to ₹3 lakh through KCC at a subsidised interest rate of 7 per cent, with 1.5 per cent interest subvention provided to eligible lending institutions.
Mint
11-05-2025
- Business
- Mint
Early monsoon in India sparks hopes for bumper harvests, easing inflation
New Delhi: India is anticipating a boost to its crucial farm sector as the monsoon rains are forecast to arrive in Kerala on 27 May, the earliest in six years, raising hopes for bumper Kharif harvests. Agriculture experts say the early arrival of monsoon will aid key summer crops such as paddy, maize, cotton, soybean and other oilseeds. The southwest monsoon is crucial to India's agrarian economy as it delivers nearly 70% of its annual rainfall. Also, about 51% of India's net sowing area is dependent on monsoon rains. Early and plentiful monsoon rains are poised to ease food supply worries, stimulate rural spending, and curb food inflation, which should also reduce electricity and diesel consumption for irrigation, they said. Also read: IMD weather update: Heatwave predicted in THESE states till 17 May, rains in Northeast India | See full forecast Monsoon rains are expected to hit Kerala on 27 May, five days earlier than usual, India Meteorological Department (IMD) said on Saturday. In 2024, the monsoon had reached the coast of Kerala on 30 May, 8 June in 2023, 29 May in 2022, 3 June in 2021 and 1 June in 2020. The early and above-normal monsoon tends to favour not just the kharif crops but also bodes well for the reservoir level and the rabi season. In addition to these crops, the outlook is also favourable for oilseeds such as soybean, horticulture crops such as tomatoes and onions, with acreages expected to increase. "Its an indication that we are going to have normal monsoon. Given the current circumstances, it would further boost our productivity and will ensure food security," said food and agriculture specialist Devinder Sharma. "The impact will be positive considering the forecast of normal monsoon. The only factor is distribution of rains with time during season," said Sudhir Panwar, farm expert and former member of the Uttar Pradesh Planning Commission. Buoyed by an above-normal monsoon forecast, the Centre has set a record foodgrain production target of 354.64 million tonnes for the crop year 2025-26. This target is 3.8%, or 13 million tonnes, more than the 341.55 mt foodgrain production recorded in 2024-25. Also read: IPL 2025 final to be moved from Kolkata to Ahmedabad due to rain threat: Reports R.S. Ghuman, economist and professor of eminence at Guru Nanak Dev University, Amritsar, added, 'If the early monsoon progresses in north in sync, then it would be beneficial especially for paddy sowing belt of Punjab, Haryana and Uttar Pradesh. Early rain will replenish the ground water especially in Punjab, which would lead to less extraction of ground water and would also boost productivity." Also, with the production increase expected in paddy, wheat, maize and other cereals, it will also help the Indian government ease its ban on exports of commodities such as wheat that will benefit farmers, traders and exporters. Good rainfall will also help bring down food inflation. The Reserve Bank of India (RBI), during its Monetary Policy Committee (MPC) meeting held from 7 to 9 April, said that adverse weather events and the rise in international agricultural commodity prices pose risks to food inflation. According to the IMD, the above-normal seasonal rainfall is 'very likely' over most parts of the country, except some areas in Northwest India, Northeast India, and South Peninsular India, where below-normal rain is expected. On 15 April, IMD said that India is expected to receive an above-normal monsoon from June to September this year. The southwest monsoon rainfall in 2025 is most likely to be above normal (>104% of the Long Period Average (LPA)). The seasonal rainfall over the country as a whole is likely to be 105% of LPA with a model error of ± 5%. The LPA of the season rainfall during 1971-2020 was 87 cm. Private forecaster Skymet on 9 April said the country will likely receive normal monsoon rain in 2025 at 103% (give or take 5%) of the long-period average (LPA) of 868.6 mm for June to September. The spread of normal is 96-104% of LPA. However, some concerns remain. Also read: India to beef up security at vital IMD installations in Srinagar and Leh 'It's good news that monsoon is going to strike Kerala coast five days before. However, a lot will depend on other variables such as intensity and how it progresses in North. As many times, it is stalled in the central part of the country," said Ajay Vir Jakhar, chairman of Bharat Krishak Samaj, a non-political farmer organization.
