Hike in wheat MSP boon to farmers, bane for consumers: Experts

New Delhi, Jan 29 (PTI) The government' & chr(39) & 's decision to hikeminimum support price (MSP) for wheat will benefit farmers,but consumers would have to shell out more for foodgrain inthe coming days, farm and industry experts say. "A rise in MSP will make wheat costlier for consumers.Traders will start hoarding the crop and this would createscarcity in the market," Roller Flour Mills Federation ofIndia Secretary Veena Sharma told PTI. Higher MSP, plus the additional processing cost of Rs100, would further increase the wheat flour rates, she said. The Centre has increased the wheat MSP to Rs 1,080 aquintal for the 2009-10 marketing season from Rs 1,000 perquintal in the previous season. According to official data, currently, retail prices ofwheat are ruling in the range of Rs 11-20 a kg across thecountry. The price in Delhi stood at Rs 13 a kg, in Mumbai Rs15 a kg and in Chennai Rs 18 a kg. A noted economist, however, said that the hike in wheatMSP may not impact inflation immediately. "Higher wheat MSP will keep the pressure on food prices.Its impact on inflation would be felt in the long run," CrisilPrincipal Economist D K Joshi said. ARPL Agri Business Services Managing Director VijaySardana also expressed similar views. "Consumer price willdefinitely increase with a rise in the base price. Higher MSPgives a psychological boost to traders to increase the pricesand consumers will have to bear the cost," he said The government has taken the step to please farmers aheadof the general elections, he added. He, however, cautioned the government, saying thatfavouring wheat farmers will only harm crops like pulses andoilseeds, in which the country is deficit. The government should have (handled prices) in a morescientific way. As profitability is high in wheat, morefarmers will divert to this crop. This will further createshortfalls in crops (whose) MSP is very low," Sardana said. Farm experts raised concerns about the nutritionalsecurity and income in other crops. Currently, India is facingshortages in pulses and edible oils. The government shouldhave taken steps to give a boost to these crops. Inflation has increased to 5.64 for the week endedJanuary 17 from 5.60 in the previous week. PTI