Union Government on 27 June 2013 raised the base price it will pay farmers for common rice to 1310 rupees per 100 kilograms from 1250 rupees as compared to year 2012.
The government has set a minimum support price (MSP) for key crops to give farmers an incentive to produce supplies needed for welfare programmes that give cheap food to half a billion poor. The MSP help protecting the farmers from excessive price falls.
India is one of the world's major producers and consumers of grains. It has built up massive stocks of rice and wheat because of abundant harvests encouraged by these assured prices.
The government is already making a plan to expand its food subsidy programmes which will need some extra supplies, but the country is still able to export both wheat and rice and sell at preferential prices to domestic bulk buyers.
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