Tuesday, August 25, 2009

Maharashtra farmers demand hike in cotton, soyabean MSP-Abhiram Ghadyalpatil, ET Bureau

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Maharashtra farmers demand hike in cotton, soyabean MSP

26 Aug 2009, 0117 hrs IST, Abhiram Ghadyalpatil, ET Bureau

MUMBAI: With less than two months to go for the Maharashtra assembly polls, the minimum support price (MSP) for cotton and soyabean has become a

sensitive issue for the farm lobbies and the Congress-NCP government in the state. Farmers have demanded an increase in the MSP for both the cash crops to offset the damage by drought.

But government officials and sources from the cotton industry are not hopeful of an upwards revision of the MSP even though the state faces an election. These sources feel that the MSP for the two crops in the 2008-09 season was higher than the open market price and an increase over the existing MSP would be an additional burden on the state finances when tackling drought has become the top priority.

“The MSP for cotton, soyabean, and other crops in 2008 was fixed higher than the open market price. In 2008-09, central government agencies like Cotton Corporation of India (CCI) and National Agriculture Federation (Nafed) have had to spend more than Rs 5,000-crore to purchase more than 80% of the total cotton produce in Maharashtra alone. It’s not advisable to revise the MSP upwards anymore,” said a senior Mantralaya bureaucrat who is associated with the pricing mechanism of agriculture produce.

In 2008-09, Nafed and CCI purchased 166 lakh quintals and 80 lakh quintals of cotton in Maharashtra at an average MSP of Rs 2800-2850 per quintal. Private traders purchased 35 lakh quintals.

Farm lobbies, however, have demanded an increase over the 2008-09 MSP to make up for the losses farmers would suffer on account of drought. Kishore Tiwari of Vidarbha Jan Andolan Samiti claimed that the state was set to witness almost 50% deficit in cotton, soyabean, jowar, and other grain yields this season.

“This calls for a serious intervention by the government in the form of a higher MSP so that the farmers are covered for the losses they incur,” Mr Tiwari said. The farm activist claimed that the Commission for Agriculture Costs and Prices (CACP), an agency under the Union agriculture ministry which fixes the MSP for agriculture produce, had actually recommended an increase in the price from Rs 3000 per quintal to Rs 3600 for cotton and from Rs 1560 per quintal to Rs 1860 for soyabean. “But the central government is not likely to accept this recommendation,” Mr Tiwari said.

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