The MSP Fixation and Recommendation Committee has proposed the price of mota dhan at Rs 2,013 per quintal. The price of medium-size paddy has been recommended Rs 2,129 per quintal, but MSP of basmati has not been fixed. The MSP of maize has been proposed Rs 1,981 per quintal.

MSP is normally announced during the planting season or a month before harvest to ensure that farmers get reasonable prices of their produce. The proposal has to be endorsed by the Cabinet for implementation. The Ministry of Commerce and Supplies is the implementing body.

The committee is led by the joint-secretary of the Agriculture Ministry and includes 17 members from

different ministries and departments.

According to Sunil Kumar Singh, joint-secretary of the Agriculture Ministry, the MSP provision has been effectively implemented in India, and it would be helpful for farmers in Nepal too.

If the MSP is endorsed by the Cabinet, it will be the first time in almost one and a half decades the country sees

such provision. The government used to fix the MSP of paddy until 1996-97, but it abandoned the practice due to inadequate storage space and infrastructure.

The committee has recommended the support price be implemented by mid-June. Under the recommended pricing, farmers would earn a net profit of more than 20 percent on their harvest.

Ministry officials said the basic idea of fixing the MSP is to discourage middlemen. However, some officials expressed doubts over its implementation as the Cabinet had rejected such proposals several times before.

MSP is the price at which the government procures paddy, and it is also the minimum market rate. For instance, if the government fixes the MSP of paddy, it has to buy it from farmers at that price even if the market price is lower. However, if the market price is higher than the MSP, the government will have little to do.

In 2012, the government had announced that it would fix the minimum price following complaints that middlemen were determining the market rate. The fixing of the MSP is in line with the recommendations of the government and the directives of former Prime Minister Baburam Bhattarai.

In 2012, the government had used the rate of Rs 19 per kg to compute the value of the country's paddy output. The average price of mota rice was Rs 1,980 per quintal in 2012.

Cereal output is projected to jump 9.4 percent to 9.56 million tonnes during this fiscal year due to timely rains and an adequate supply of chemical fertilizers. The overall growth in cereal production has helped the agricultural sector to swell 4.72 percent this year. The agricultural sector grew 1.07 percent in the last fiscal year.

Out of the total production, the output of summer crops-paddy and maize is expected to jump 12 percent and 9.8 percent. Paddy occupies a 53 percent share in the total cereal output and is valued more than Rs 100 billion while the share of maize is 24 percent.