Kharif MSP hiked 5-9% for 2022-23 season, largest spike in pulses, oilseeds

The government today raised the (MSP) of kharif crops for the 2022-23 sowing season by around 5-9 per cent with the maximum hikes reserved for pulses and oilseeds notably moong, soybean and sunflower seed as has been norm since the last several years.

The of Jowar was also raised sharply to encourage farmers to plant more of this less-water guzzling and highly nutritious crop.

In the case of moong, which is one of the main pulses grown during the kharif season, the has been raised by 6.60 per cent in 2022-23 (July to June) over 2021-22, from Rs 7,275 per quintal to Rs 7,755 per quintal.

The for soybeans and sunflower seeds has been raised by 8.86 per cent and 6.40 per cent respectively. The lowest increase has been for bajra.

“The average price hike would be around 5.8 per cent for these commodities. Given a weight of 3.4 per cent in the overall index, the direct impact on WPI inflation can be around 0.20 per cent if all crops receive the higher price,” Madan Sabnavis, Chief Economist at Bank of Baroda said.

Edible oil prices have been on the boil since the last several months, which has further aggravated after the Russia-Ukraine crisis. The current market price of both soybeans and groundnut is ruling much above the revised MSP of 2022-23 season.

Soybeans are selling at around Rs 6400-7000 per quintal in the open markets and groundnut is being quoted at around Rs 5700-6600 per quintal. This is much above their new MSPs of Rs 4300 and Rs 5850 per quintal respectively.

“The hike in MSP of oilseeds is a step in the right direction. As farmers get a secured price for their crops, it will encourage more and more farmers to grow oilseeds as well as prompt them to shift away from grains. The area under oilseed cultivation has been on a steady rise over the last few years and with today’s rise, we expect it to rise further,” Suresh Nagpal, Chairman, COOIT (Central Organisation for Oil Industry & Trade), an apex association of edible oils, said.

In case of paddy, whose MSP has for the first time crossed Rs 2000 per quintal, analysts believe it could spur sowing in Punjab, Haryana and UP.

“Last year farmers got good prices for Paddy. In states like Punjab, Haryana and Uttar Pradesh paddy acreage might rise due to this, but in the Malwa region that lies in South of Punjab, cotton area may increase,” Rahul Chauhan, an analyst with iGrain India told Business Standard.

He said in Andhra Pradesh and Telangana, area under groundnut might rise due to higher prices.

Among other important crops, the MSP of cotton, which is another major crop grown during the kharif season, the MSP of the medium staple variety has been raised by 6.18 per cent in 2022-23 as compared to 2021-22 from Rs 5,726 per quintal to Rs 6,080.

That of the long staple variety has been raised by 5.89 per cent from Rs 6,025 a quintal to Rs 6,380 a quintal.

“The only concern is, that while increased MSPs may boost rural income and purchasing power, this can also increase inflationary pressures further. To note, the wholesale inflation in April – 2022 rose to 15.08 per cent, which is the highest in the last one and a half-decade.,” Dr Kalyan Goswami, Director General, Agro Chem Federation of India, a body representing pesticide manufacturers and importers, said.

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