New Delhi: The government has decided to raise the minimum support price of paddy by Rs 80 per quintal for the 2011-12 kharif season in order to enhance rice production and procurement.

The MSP for paddy (common variety) was at Rs 1,000 per quintal and paddy (A grade) Rs 1,030 per quintal last year.

"The Cabinet Committee on Economic Affairs on Thursday approved hike of Rs 80 per quintal in the minimum support price (MSP) for both varieties of paddy," a official source said.

The government has raised paddy MSP substantially as input costs have increased by upto 64 per cent. Besides it wants to raise output in view of the proposed National Food Security law, sources said.

However, the hike in paddy MSP is lower than Agriculture Ministry's proposal of a hike of Rs 160/ quintal. Sources said the government may announce bonus of Rs 80 per quintal over and above the MSP in the coming months.

MSP is the price at which the government buys paddy from farmers to run the Public Distribution System (PDS). Kharif sowing starts from June and harvesting begins from October.