Incentive bonus on paddy MSP approved

The Cabinet Committee on Economic Affairs on Thursday approved a Union Food Ministry proposal to give an incentive bonus of Rs.50 per quintal on paddy over and above the MSP for the kharif marketing season 2009-2010. The committee was chaired by Prime Minister Manmohan Singh.

As reported in The Hindu, the Government maintained that the decision to give an incentive bonus was to facilitate higher procurement of rice in the central pool against the background of an estimated shortfall of 16 million tonnes in rice output this kharif, owing to drought .

The MSP for the common variety of paddy is Rs.950 per quintal and Rs.980 per quintal for the Grade A variety.

The incentive of Rs.50 to the MSP would enable farmers get Rs.1000 per quintal for the common variety and Rs.1030 per quintal for the Grade A variety. With a procurement target of about 260 lakh tonnes, the Rs.50 bonus would entail a financial implication of Rs.1884.79 crore.

The bonus would be given with retrospective effect, Union Home Minister P. Chidambaram told journalists.