NEW DELHI: On a day the Centre increased the minimum support price (MSP) for wheat by 7% — the highest in nine years — official data showed a 4.4% jump in food production for the last fiscal, as per final estimates.
The absolute increase in wheat MSP is Rs 150 — from Rs 2,125 for 2023-24 to Rs 2,275 per quintal for 2024-25. The highest increase in MSP was for lentil (masur) at Rs 425 per quintal followed by rapeseed and mustard at Rs 200 and safflower at Rs 150 (see table).
The hike in MSP was recommended by the Commission for Agricultural Costs and Prices (CACP). The government claimed the MSP figures are in line with the principle of at least 1.5 times the weighted average cost of production.
But the fact is that the government tweaked the formula to suit its narrative of 1.5 times from the cost of production as recommended by the M S Swaminathan Commission. CACP has three categories to calculate the cost of production: A2, A2+FL and C2. A2 represents actual cost of farming including seeds, fertilisers and hired labour. A2+FL includes family workers in addition to A2. And C2 represents the cost of land rentals or interest on invested capital in addition to A2+FL.
The Swaminathan Commission had recommended C2+50% but the government is providing A2+50%.
As for food production in FY23, it was 140.71 lakh tonnes (LT) higher than 2021-22. Also, the figure is higher than the previous five years’ average production.
Total food grain production in FY23 is estimated at a record 3,296.87 LT. The 2022-23 production is higher by 308.69 lakh tonnes than the previous five years’ (2017-18 to 2021-22) average production. Major contributions in India’s granary come from rice and wheat, which also registered a sharp increase despite inclement weather last year.
The total production of rice during 2022-23 is estimated at a record 1,357.55 LT, which is higher by 62.84 LT than the previous year. Besides, the production of rice was 153.65 LT more than the last five years’ average production of 1,203.90 lakh tonnes. Wheat, too, followed a similar trend. The total production of wheat during 2022-23 is estimated at a record 1,105.54 LT, which is higher by 28.12 LT than the previous year’s figure of 1,077.42 LT and is 48.23 LT more than the five-year average of wheat production of 1,057.31 lakh tonnes.P10