Published on 10/06/2021 9:39:06 AM | Source: Motilal Oswal Financial Services Ltd

MSP hike kept unchanged for Kharif crop marketing season in FY22 - Motilal Oswal

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* The government has approved an increase in the Minimum Support Price (MSP) for all 14 mandated Kharif crops for marketing season FY22 on 9th Jun’21.

* The production-weighted average MSP hike of all these 14 crops stood at 4.1% YoY in FY22, similar to FY21, but higher than the 3% YoY in FY20.

* “The expected returns to farmers over their cost of production is estimated to be highest in case of bajra (85%), followed by urad (65%) and tur (62%). For the rest of the crops, return to farmers over their cost of production is estimated to be at least 50%,” a government release said. The government calculates cost as a function of cost of cultivation, plus the value of family labor (A2 + FL).

* The highest absolute increase in MSP in FY22 over FY21 has been recommended for sesamum (INR 452/quintal), followed by tur and urad (INR300/quintal each).


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