Wheat Current Affairs

Union Government scraps import duty on wheat  

The Union Government has waived the import duty on wheat to zero from 10 per cent for an indefinite period.

This move aims to improve domestic availability in the wake of rising prices and concerns about the wheat crop in 2016-17.

The duty was waived because of uncertainty over the wheat output this year. Despite a rise in area sown, questions are raised over condition of the wheat crop, low fertiliser and pesticide use due to and fears of a warm winter.

The waiving of import duty will make wheat imports (especially from Australia and Ukrainian) considerably cheaper. This will fuel imports to over 6 million tonnes in 2016-17. This will be the highest wheat imports in the 10 years.

Background

The wheat production in the country will be around 93.50 million tonnes in 2016-17 as per the government estimates. However, many experts have pegged the figures around 90 million tonnes due to year-on-year droughts in 2014 and 2015. Moreover, Union Government’s own wheat stocks are at an all-time low due to less procurement.

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CCEA hikes MSP for major Rabi crops including wheat, gram and pulses

Government has hiked Minimum Support Price (MSP) of Rabi crops including wheat and pulses for Rabi season 2015-16. The MSP of pulses was taken to boost the production as country is facing acute shortage due to domestic demand-supply gap/

Decision in this regard was taken by the Cabinet Committee on Economic Affairs (CCEA) meeting chaired by Prime Minister Narendra Modi in New Delhi.

MSP of Rabi crops for season 2015-16

Crop

MSP per quintal 
Wheat 1525
Gram (Channa) 3500
Lentil (Masur) 3400
Mustard 3350
Safflower 3300
Barley 1225
*Note: Figures in Rupees

CCEA also gave its approval for allocation of additional 27 lakh tonnes of foodgrains to Below Poverty Line (BPL) and Above Poverty Line (APL) families through Public Distribution System (PDS).

This will be for states which have yet not implemented National Food Security Act (NFSA), 2013. So far 20 States have implemented the Act and by March 2016 rest of the states will implement the NFSA.

What is Minimum Support Price (MSP)?

  • MSP is a form of agricultural market intervention undertaken by the Central Government in order to insure agricultural producers are protected against any sharp fall in farm prices.
  • The MSP prices are announced by the Central Government at the beginning of the sowing season for certain crops.
  • The prices are decided by CCEA on the basis of the recommendations of the Commission for Agricultural Costs and Prices (CACP).

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