Vol. 8, Issue 1 (2019)

Author(s):
Shubhi Patel and Rakesh Singh

Abstract:
Government announces Minimum Support Price for crops and procures the same. Budget 2018 ensured that Minimum Support Price will be 1.5 times the Cost of Production. The study analyzed the growth trend in minimum support price of wheat and paddy for a period of 1975-76 to 2017-18 and compared minimum support price and cost of production for a period of 2010-11 to 2016-17. The study reveals that the growth rate of minimum support price of paddy was 7.84 and that of wheat was 7.49. The study also indicated that minimum support price of wheat ranged from 1.4 to 1.2 times the cost of production. In case of paddy the growth rate of cost of production was 10.33 while that of minimum support price was 6.54 indicating decreasing profit margin over the years. Thus, there is need to increase the minimum support price in proportion to the increase in cost of production.