Cabinet will approve rates at 150% of input costs, Modi tells cane farmers at meeting

The Union Cabinet will approve minimum support prices (MSP) at 150% of input costs for kharif crops at its next meeting, Prime Minister Narendra Modi assured a group of sugar cane farmers, who met him at his residence on Friday evening.

The PM’s reassurance comes as farmers’ groups have started agitating on the lack of announcement on MSP rates, though sowing of kharif crops has begun in most parts of the country. The MSPs act as a price signal for farmers and are usually announced in early June, at the onset of the monsoon, when sowing begins.

On Friday, the India Meteorological Department announced that the monsoon had now covered the entire country, and the Agriculture Ministry announced that the total sown area has crossed 165 lakh hectares.

Announcements soon

The Prime Minister also assured farmers that the Fair and Remunerative Price for sugar cane for the 2018-19 season would be announced within the next two weeks, and would be set higher than the 2017-18 rate, according to an official statement. The FRP will also incentivise farmers whose crops have a sugar recovery rate higher than 9.5%, Mr. Modi said.

More than 140 farmers from major sugar-producing States — Uttar Pradesh, Maharashtra, Karnataka, Uttarakhand and Punjab — met the Prime Minister.

With sugar mills’ arrears to cane farmers crossing Rs. 22,000 crore, the government has approved several relief measures over the past few months, including a production subsidy, buffer stock, minimum retail price and a hike in import duties, apart from steps to increase ethanol production from cane. Mr. Modi told the farmers that more than Rs. 4,000 crore in arrears had been paid off over the past seven to 10 days as a result of these new policy measures.

Dues reduced: Paswan

Earlier in the day, Union Minister for Food and Civil Supplies Ram Vilas Paswan told presspersons that the pending dues had been reduced by Rs. 3,000 crore, with government data showing that the total arrears stood at Rs. 19,816 crore as on June 25.

The NITI Aayog has held several consultations with farmers’ groups earlier this week regarding the implementation of the MSP, according to a person aware of the meetings.

According to government officials, several States expressed reservations about the three options which NITI Aayog proposed in March to ensure that the MSP was actually available on the ground. The first proposal would make States responsible for procurement, storage and disposal of crops with partial financial support from the Centre; the second would pay farmers the price difference between market rates and MSP without any crop procurement, and the third would involve procurement by private agencies and traders at MSP rates.