Surging prices notwithstanding, the government today hiked the minimum support price of pulses by up to Rs 700 to a maximum of Rs 3,170 a quintal but support for paddy has been increased by a meagre Rs 50 a quintal.

The MSP for pulses, considered to be the wholesale market benchmark, is just about 30--50 per cent of retail prices of some varieties like moong, urad and arhar that are being sold for up to Rs 100 a kg in retail market.

A decision for raising MSP of kharif crops for 2010-11 was taken at a meeting of the Cabinet Committee on Economic Affairs, chaired by Prime Minister Manmohan Singh.

An agriculture ministry official later explained that higher MSP was meant as an inducement to farmers to go for increasing the acreage for cultivation of pulses, for which India is a net importer and the sharp rise in prices is on account of higher commodity prices globally.

The highest increase was given for the widely consumed arhar dal (tur), the MSP for which has been increased to Rs 3,000 a quintal from Rs 2,300 last year.

The MSP for moong, another popular variety, has been increased to Rs 3,170 per quintal from Rs 2,760. Support price for urad has been increased to 2,900 a quintal from Rs 2,520 last year.

"The hike in MSP for arhar is Rs 200 more than what the Commission for Agricultural Costs and Prices had recommended considering the importance of this pulse," an official said.

Arhar dal prices had skyrocketed to about Rs 100 a kg a year ago and even now it is ruling above Rs 70 a kg. Moong is selling above Rs 100 a kg in the retail market.

India is a net importer of pulses despite being the largest producer. The country produced 14.77 million tonnes in 2009-10 against a requirement of 18-19 million tonnes.

Unlike in the case of paddy and wheat, the government does not procure pulses from farmers, but it intervenes if prices fall below the MSP.

The MSP for paddy (common variety) has been increased to Rs 1,000 per quintal from Rs 950 last year, while the new MSP for Grade A variety stands at Rs 1030 per quintal from Rs 980.

However, the net benefit to farmers will be nil as they were given a bonus of Rs 50 per quintal last year over an above the MSP. The government may announce bonus later when procurement starts in October.

The food inflation for the week-ended May 29 stood at 16.74 per cent and the government has been devising ways to tackle it. .

In oilseeds, the support price of groundnut has been raised to Rs 2,300 a quintal from Rs 2,100 a quintal.

The soyabean (black) support price has been increased to Rs 1,400 a quintal from Rs 1,350 a quintal. The MSP of the yellow soyabean variety now stands at Rs 1,440 a quintal against Rs 1,390 a quintal last year.

The MSP of sunflower has been increased to Rs 2,350 a quintal from Rs 2,215 a quintal. The sesame support price has gone up to Rs 2,900 a quintal from Rs 2,850 a quintal, while the nigerseed MSP has increased from Rs 2,405 a quintal to Rs 2,450 a quintal.

In coarse cereals, the MSP of both maize and bajra have been raised to Rs 880 per quintal from Rs 840 a quintal in 2009-10. The MSP for jowar (hybrid) has been hiked by Rs 40 a quintal to Rs 880, while that of jowar (maldandi) was increased to Rs 900 a quintal.

Related report -

Paddy support price increases by Rs 50 a qtl

The government today announced an increase of Rs 50 per quintal in the support price, that it will pay to farmers for purchasing paddy, at Rs 1,000 a quintal for the crop year 2010-11.

The decision to announce the minimum support price was taken by the Cabinet Committee on Economic Affairs (CCEA), presided over by Prime Minister Manmohan Singh.

The MSP increase of Rs 50 per quintal would be applicable to both common and 'Grade A' varieties. For Grade A, the MSP would stand increased to Rs 1,030 a quintal, Home Minister P Chidambaram told reporters after the CCEA meet.

In the previous year, the government had announced a bonus of Rs 50 over and above the MSP of Rs 950 per quintal.

Similar offer may be extended this year when procurement starts from October, sources said.