The minimum support price (MSP) of raw jute has been increased by Rs. 200/- per quintal for the 2018-19 fiscal year.
The government approved the bill for the increment in MSP for raw jute on Wednesday. The decision to increase the MSP for fair average quality (FAQ) of raw jute to Rs. 3700 per quintal for 2018-19 crop season from Rs. 3500/- per quintal in 2017-18 was taken at the meeting of the Cabinet Committee on Economic Affairs (CCEA) chaired by the Prime Minister Shri Narendra Modi in Delhi.
According to the approval by the government the MSP would yield returns of 63.2 % over the weighted average A2+FL (covers actual paid-out cost plus an imputed value of unpaid family labour) cost of production. The increased MSP is based on recommendations of Commission for Agricultural Costs and Prices (CACP) which while recommending MSP takes into account the cost of production, overall demand-supply, domestic and international prices, inter-crop price parity, terms of trade between agricultural and non-agricultural sectors and the likely impact of MSP on the rest of the economy.
In the budget for 2018-19, the government had announced fixing MSPs at 1.5 times the cost of production for various crops. The increased MSP would benefit the jute farmers of various states in India, mainly in Assam, Bihar, and West Bengal, which contributes up to 95 % in country's jute production.
According to the release, the Jute Corporation of India would continue to act as central nodal agency to undertake price support operations at the MSP in jute growing states.
