Govt defers wheat MSP issue

Govt defers wheat MSP issue
HARISH GUPTA

NEW DELHI, FEB 11: A big fight is in store for the NDA Government on the issue of hike in the Minimum Support Price (MSP) for wheat.

The Cabinet Committee on Economic Affairs (CCEA) -- which met earlier thisweek with the Prime Minister presiding -- has deferred a decision on the MSPissue.

Though Punjab Chief Minister Parkash Singh Badal, Haryana Chief Minister Om Prakash Chautala and others had conveyed to Vajpayee that they wanted MSP of wheat to be fixed at at least Rs 600 per quintal, the CCEA has skirted the issue for the time being.

Union Finance Minister Yashwant Sinha and Food Minister Shanta Kumarstrongly opposed any increase in the MSP by Rs 20. While Sinha said thatthe food subsidy bill had already touched the Rs 12,000 crore mark -- Rs 4,000crore more than the Budget estimate -- Shanta Kumar said that the FoodCorporation of India had no place to store the procured foodgrains.

The two ministers said that procurement policy had resulted in harming the interests of farmers and prevented diversification of crops. The FCI's total storage capacity was about 300 million tonnes, but with the problem of abundant crop, it is now saddled with 400 million tonnes.

The Government should provide support to the farmers in producing high quality foodgrains so that the same can be exported. Secondly, the Government should procure only what is required for the Public Distribution System. Now that the PDS requirement is going down as people above poverty line (APL) have been knocked out of it, the FCI should not be burdened with buying huge quantities, they said.

The CCEA also ignored Badal's request for hiking the price of wheat by Rs 10 per quintal, which might have helped him in the Majitha by-polls. Sources say that the Government is unwilling to increase the MSP for wheat from Rs 580 per quintal this season. The Agriculture Price and Cost Commission under the Ministry of Agriculture has also opposed any hike in the MSP this season.