Govt-set paddy prices of little use to farmersThe government has fixed the minimum support price (MSP) of paddy, but an ambiguous rider has undercut its usefulness to farmers.
The government has fixed the minimum support price (MSP) of paddy, but an ambiguous rider has undercut its usefulness to farmers.
The Cabinet has also asked the Supplies Ministry to purchase paddy after assessing the market price through Nepal Food Corporation (NFC), Lekhnath Acharya, joint secretary of the Ministry of Agricultural Development, told a parliamentary Agriculture and Water Resources Committee meeting on Monday.
This is the first time in nearly two decades that the government has set the MSP, which is the rate at which the government guarantees to buy farmers’ harvests to protect them from being wiped out if market prices should plunge.
The MSP of common paddy has been fixed at Rs2,230 per quintal and of ‘mota dhan’ at Rs2,070 per quintal as recommended by the Agricultural Ministry. “However, we have found that NFC has been procuring paddy below the MSP,” he said.
Moreover, the MSP announcement was not made in time for farmers to make their production plans before the beginning of the planting season.
“It is absurd that the government announced the MSP in mid-November even though many farmers harvest their crops and sell them by October-end,” said lawmaker Man Bahadur Tharu. “The government has been duping farmers.”
The MSP is a form of market intervention by the government to insure agricultural producers against any sharp fall in farm prices.
It is announced at the beginning of the sowing season. The MSP is a guarantee price for their harvests from the government.
Another lawmaker Kashinath Adhikari said that the MSP fixed by the government was nominal and needed to be reviewed. He added that the MSP was a big incentive for farmers to boost output, but the floor price fixed by the government would discourage farmers instead.
Responding to the reactions of lawmakers, Agriculture Minister Gauri Shankar Chaudhary admitted that the announcement was not be made in time. “However, it was not a mistake on the part of the Agriculture Ministry,” he said. “We dispatched the MSP proposal to the Supplies Ministry two months ago, and from there it was passed around to various ministries.”
The practice of announcing the MSP of paddy and wheat ended in 1999. The provision was fully abandoned after the government launched the 20-year Agriculture Perspective Plan.
Meanwhile, Agricultural Ministry officials told lawmakers that they were working to announce the MSP of winter crops like sugarcane, maize and wheat as well. According to Acharya, they have written to the Agribusiness Promotion and Marketing Development Directorate to fix the floor prices of these crops.
Lawmaker Amrit Bohara praised the government for setting the MSP of sugarcane. “It has been a tradition for sugarcane growers and sugar mills to engage in a bitter confrontation over the floor price during harvest time,” he said.
Since last year, the government has been setting the MSP of sugarcane. The rate in Nepal is normally based on the price offered by Indian mills to their farmers. The price was set at Rs460.61 per quintal last year.