February 23, 2024

 

Farmers in Punjab and Madhya Pradesh, India, likely to get higher price for wheat

 

 

In Indian states Punjab and Madhya Pradesh, farmers will receive a price higher than what they have been long demanding for wheat.

 

Both states together account for almost 35% of India's wheat production and contributed over 70% to the total procurement done for the central pool in the rabi marketing season (2023-24).

 

Data compiled from the reports of the Commission for Agricultural Costs & Prices (CACP) — an expert body set up by the Indian government that recommends Minimum Support Prices (MSP) for agriculture products based on input costs — showed that the MSP for wheat — ₹2,275 (US$27.40) per quintal — fixed by the Centre for Rabi Marketing Season 2024-25 is higher than C2 plus 50% (where C2 is the cost of production and is equal to the paid out cost plus imputed value of family labour and the rental value of owned land and interest on fixed capital), as demanded by farmers. 

 

The CACP, however, recommended the MSP based on the formula A2+FL, and the government eventually declares the same; A2 includes only paid out costs incurred by the farmers. A2+FL is equal to paid out cost plus imputed value of family labour and this is lower compared with C2.

 

In its report "Price Policy for Rabi Crops: Marketing Season 2024-25", the CACP has pegged the C2 cost of production of wheat at ₹1,503 (US$18.10) per quintal (100 kilogrammes) for Punjab. Against this cost, farmers will receive the MSP of ₹2,275 (US$27.40) per quintal — resulting in a return of ₹772 (US$9.30) per quintal or 51.36%.

 

For paddy, the return for Punjab farmers over the C2 cost was 49% and 152% over the A2+FL. As per CACP report, the projected A2+FL cost for paddy in Punjab during kharif marketing season 2023-24 was estimated at ₹864 (US$10.41) per quintal and the C2 cost at ₹1,462 (US$17.61) per quintal. When it is compared with the MSP of ₹2,183 (US$26.29) per quintal, the return over the A2+FL comes 152.66% and over C2 cost, it comes 49.32%.

 

The all-India overall return over the C2 costs of production stood at 14.23% for paddy and 34.92% for wheat during the marketing season 2023-24.

 

One of the reasons for higher return in Punjab is due to higher yield. As per report, paddy yield in the state was projected at 69.84 quintal per hectare as compared to India's yield of 43.66 quintal per hectare.

 

The projected wheat yield of Punjab was 49.98 quintal per hectare for RMS 2023-24, highest among all Indian states.

 

Punjab accounts for 15% of India's total wheat production and ranks third among all states.

 

- The Indian Express