The Government on Wednesday hiked the minimum support price (MSP) for wheat for this season by 5 per cent, or Rs 65, to Rs 1,350 per quintal.

The Commission for Agricultural Costs & Prices (CACP) had recommended a freeze on the wheat MSP at previous year's level along with a bonus of Rs 40 per quintal; while the Commission for Agricultural Costs & Prices (CACP) had recommended a freeze on the wheat MSP at previous year's level along with a bonus of Rs 40 per quintal.

But, the Cabinet Committee on Economic Affairs (CCEA) turned down both the recommendations, and approved a hike of 5 per cent in the MSP.

In 2011, the Government had increased MSP for wheat by around 10 per cent from Rs 1,170 per quintal to Rs 1,285 per quintal.

P K Joshi, director (South Asia) of International Food Policy Research Institute, said increasing floor prices appeared good in short term to benefit farmers, but in the long term, other ways would have to be found out to benefit them without increasing inflation.

Speaking on the topic, Joshi suggested, "We need to improve productivity and reduce unit cost of production to be competitive in price-sensitive global market."

The Government has also approved additional export of 2.5 million tonnes of wheat from its godowns to clear surplus stock and make way for the new stock.

Farmers have sown wheat crop across 25.3 million hectares this year. The figure is marginally lower than 25.7 million hectares last year.