Panel for linking mustard MSP to oil content, farm min turns it down

The Commission on Agricultural Costs and Pricing, in a report on 2017-18 rabi crops, had recommended linking the minimum support price of mustard seed with oil content to incentivize farmers to switch to better varieties. The minimum support price of mustard should be linked to the basic oil recovery of 35%, with higher price for every 25 basis point increase in oil content beyond the basic level. There are variations in oil content of different varieties of R&M (rapeseed and mustard) and therefore a uniform MSP may not be desirable. While the average oil content in mustard is 35%, varieties grown in Rajasthan and parts of Gujarat have oil content of up to 40-48%. The pricing panel proposed paying farmers 15.83 rupees per 100 kg for every 25 basis percentage point increase in oil content above the base level of 35%. The farm ministry, however, rejected the panel’s proposal on the grounds that it would be tough to implement. The government instead announced a flat bonus of 100 rupees per 100 kg on the minimum support price of 3,900 rupees for mustard recommended by the pricing panel for this rabi season, to ensure farmers get more money.