The government has raised the minimum support price for paddy by more than 7.5 percent for the harvest of the next fiscal year 2022-23.

This is the first time in years that the government has fixed the minimum support price during the paddy transplantation period.

Government spokesperson Rekha Sharma said that the Cabinet meeting held on Tuesday decided to increase the minimum support price of common paddy to Rs3,365 per quintal, up 7.57 percent.

Similarly, the floor price for ‘mota dhan’ has been increased to Rs3,198 per quintal, up 7.78 percent.

“The cabinet has announced the minimum support price of paddy based on the recommendation of the Ministry of Agriculture and Livestock Development,” said Sharma.

The minimum support price is the lowest legal price that can be paid for farmers’ harvests.

The government does not fix the floor price of fine paddy.

A minimum support price is an intervention by the government to protect farmers against sudden slumps in the market price. It is the rate at which the government buys farm produce when no other buyers are in the market.

Normally, it is announced in time for farmers to make their production plans before the beginning of the planting season. The government has to buy a certain amount of the total paddy harvest under the scheme.

In 2012, the government announced the resumption of the policy of fixing the minimum price following complaints that middlemen had been determining the market rate.

Until 1999, the minimum support price for paddy and wheat would be announced regularly.

The practice was fully abandoned that year after the government launched the 20-year Agriculture Perspective Plan, according to reports.

Even when the minimum support price was announced, it was irrelevant as it was set well below the projected market price to protect the government from having to buy farm products should prices tumble.

Moreover, reports said that even when support prices were announced, it was not done before the beginning of the planting season.

In 2017-2018, although the advisory body of the ministry had recommended the minimum support price, it was never implemented as the proposal of the supplies ministry was sent back by the Cabinet citing the provincial and federal elections.

In 2016-17, the minimum support price was announced in mid-November. Members of parliamentary committees said that the government’s policy was ‘absurd’ because the minimum support price was announced in mid-November when many farmers would have already harvested and sold their harvests by October-end.

Lawmakers said that the MSP was supposed to be an incentive for farmers to boost output, but the floor price fixed by the government had ‘discouraged’ them instead.

Last year too, the government announced the minimum support price for paddy on November 3, which is the harvest time. The price was raised by 8 percent.

The minimum support price for common paddy was raised to Rs3,128 per quintal for the 2021-22 harvest. Similarly, the floor price for ‘mota dhan’ was increased to Rs2,967 per quintal.