Government hikes support prices for grain, pulses

New Delhi: With drought declared in half of India, the Government said on Thursday it would "respond appropriately" to mitigate the situation and would increase the minimum support price (MSP) of cereals and pulses to help farmers.

"We are taking it step by step. It is an evolving situation and the government will respond appropriately," Home Minister P Chidambaram said, while announcing that the support price for paddy has been hiked by Rs 100 per quintal and that for pulses by Rs 300 per quintal.

He was briefing reporters in the Capital after a meeting of the cabinet committee on economic affairs presided over by Prime Minister Manmohan Singh.

The support price for common paddy will now go up to Rs 950 per quintal from Rs 850, while that for the A grade variety will be Rs 980, up from Rs 880, Chidambaram said.

"The Government has already declared its intention to take every step to mitigate the situation. MSP is one forum for rewarding and giving relief to farmers," he added.

The minimum support price per quintal for tur dal has gone up from Rs 2,000 to Rs 2,300, for moong dal from Rs 2,520 to Rs 2,760 and for sesame from Rs 2,750 to Rs 2,850.

India had logged record foodgrain production during 2008-09 (July-June), which was estimated at 233.87 million tonnes.

But the failure of the monsoon this season, on which 60 percent of Indian agriculture depends, has cast a shadow on this year's crop.

In this context, Chidambaram noted that the government had "huge" stocks of foodgrains to last 13 months.

Asked whether the government was considering another waiver of farmer's loans, he replied: "I am only the former finance minister. I don't know."

Finance Minister Pranab Mukherjee has already ruled out another waiver - after the Rs 70,000 crore loans written off early last year to benefit some four million small and marginal farmers.

Referring to the steps being taken to prevent hoarding, Chidambaram said that though the issue was on the concurrent list, "the suggestion is that the states do it".

De-hoarding operations, he noted, "follow stock limits being placed".

"I must point to the good work of the Madhya Pradesh government some ago in de-hoarding 30,000 tonnes of sugar," Chidambaram added.