November 6, 2012

Leaders of two of India's biggest wheat producing states, Punjab and Haryana demanded that government should raise the Minimum Support Price (MSP) of wheat to compensate for the sharp increase in input costs.

Punjab's deputy chief minister Sukhbir Badal went a step further and lambasted the central government for discouraging Punjab farmers to grow wheat which could create a global crisis. He said the indecisiveness of the Central government is crushing farmers in Punjab.

Punjab along with Haryana, produce more than 80% of the total wheat grown in the country. Both the states are also major contributors of the grain to the central pool.

"I am shocked. If by chance, production of wheat goes down because Punjab farmers are discouraged from producing wheat; there will be crisis of wheat in the world. Punjab meets 60% of the total wheat requirement of the country," Badal told reporters on the sidelines of a CII conference on investment in North India.

Bhupinder Singh Hooda meanwhile said that he has written to the union agriculture ministry to raise the MSP of wheat because of rising cost of fertiliser. The union cabinet in a its meeting held earlier this week, held back any decision on raising the MSP of wheat for 2013-14 season because of lack of consensus among different ministries. Officials said the cabinet members wanted more discussion on the matter before making a taking a final call.

Officials said the union food ministry in favour of a freeze on MSP of wheat because of rising food subsidy bill, but agriculture ministry wants a 9-10% increase because of increase in input costs.

The Commission for Agriculture Costs and Prices (CACP), the government's nodal agency to determine the prices of farm products had for the first time in almost 10 years recommended freezing the MSP of wheat in 2013-14 at INR1,285 (US$23.5) per quintal.