Bearish signals: When minimum support price is only on paper

-The Indian Express

For the Modi government and farmers, it’s not MSPs for rabi, but below-MSP rates for kharif crops now being marketed, that should really worry.

New Delhi: Promising something is much easier than having the capacity to deliver. This is a reality that the Narendra Modi government may have to reckon with in the current kharif marketing season itself, even as it has announced a fresh round of minimum support price (MSP) increases for the about-to-be-planted rabi crops.

Farmers have already started bringing their freshly-harvested kharif crops of moong (green gram), urad (black gram), bajra (pigeon-pea) and short-duration paddy varieties, besides early pickings of cotton, into the mandis. Peak arrivals will happen, though, only after the middle of this month. But even before that, almost all kharif crops are selling at well below their declared MSPs.

Take, for instance, bajra. This coarse grain is quoting in major markets across poll-bound Rajasthan at Rs 1,250-1,350 per quintal, as against the MSP of Rs 1,950 announced by the Modi government. Jowar, likewise, is trading in Jalgaon, Latur, Sholapur and other centres of Maharashtra at Rs 1,200-1,400 per quintal. Its MSP was handsomely raised from Rs 1,700 per quintal in 2017-18 to Rs 2,430 for this season, just as that of bajra was, from Rs 1,425 to Rs 1,950.

Even more revealing is ragi or finger-millet. This crop’s MSP was hiked by 52.5 per cent — from Rs 1,900 to Rs 2,897 per quintal. But its current average modal price at Davangere and the Nagamangala market of Karnataka’s Mandya district — according to data from the Union Agriculture Ministry’s own agmarknet.in portal — is in the Rs 2,100-2,200 range. In the case of kharif pulses — arhar (pigeon-pea), moong and urad — the ruling market rates are below not only their latest, but even the 2017-18 and 2016-17 MSPs of Rs 5,450 and Rs 5,050/quintal, Rs 5,575 and Rs 5,225/quintal, and Rs 5,400 and Rs 5,000/quintal, respectively (see accompanying table).

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