In its first cabinet meeting after the completion of an year in office, the cabinet of Prime Minister Narendra Modi has decided to increase the minimum support price (MSP) of 14 different crops, which will result in the farmers reaping a profit of 50 per cent or more on their yield. The new upper limit of profit has been decided at 83 per cent. In effect, the minimum support price on 14 different kharif crop varieties has been increased anywhere between 50 to 83 per cent.
Three senior members of the Modi 2.0 cabinet- Union Environment Minister Prakash Javadekar, Roads, Highways and MSMEs Minister Nitin Gadkari and Agriculture and Rural Development Minister Narendra Singh Tomar- were addressing a press briefing after the completion of the first cabinet meeting on the completion of Modi 2.0's first year in office.
The MSP for paddy has been increased by Rs 53 per quintal to Rs 1,868 per quintal for the 2020-21 crop year, said Narendra Singh Tomar. For cotton, the MSP has been increased by Rs 260 to Rs 5,515 per quintal for 2020-21, he added.
The MSP rate for paddy is now at Rs 1,868 per quintal, jowar at Rs 2620/quintal and bajra at Rs 2,150/quintal. Further, a 50 per cent increase in ragi, moong, groundnut, soyabean, til and cotton for the year 2020-21 will also come into effect.
In another major announcement to provide relief to farmers reeling under the impact of coronavirus-induced lockdown, Tomar announced an extension on repayment of farmers' loans date till August 31. If a farmer who has availed a loan of Rs 3 lakh can repay it back by August 31, then they would be eligible to avail the loan at a discounted rate of four per cent, he explained.
The earlier date for availing the four per cent interest rate was May 31, which has now been extended.
Tomar explained that, while, farmer get their loans at nine per cent interest from the banks, the government accounts for two per cent subsidy in that interest, which brings down the overall interest rate to seven per cent. If the farmer is able to pay that loan on time (August 31), they are eligible for further three per cent interest rate cut.
The overall rate of interest at the end, at which the farmer sources the loan from the bank, will be four per cent, given that they are able to repay their loan by August 31.