India raises crop prices by the most in five years

NEW DELHI, June 8 (Reuters): India on Wednesday raised the government-mandated price for summer-sown crops such as rice and cotton by the most in five years as Prime Minister Narendra Modi looks to woo millions of farmers ahead of a general election next year.
The country announces support prices for more than a dozen crops each year to set a benchmark. But analysts say the bigger than usual hike could hit government finances and stoke inflation.
India has raised the price at which it will buy new-season common rice paddy from farmers by 7 per cent to 2,183 rupees ($26.45) per 100 kg, trade minister Piyush Goyal told reporters after a cabinet meeting chaired by Modi.
The government is keen to boost rice output after it banned exports of broken rice in September and imposed a 20 per cent tax on exports of various grades to calm domestic prices.
This year, government sources told Reuters that the ban on broken rice exports and a 20 per cent tax on overseas shipments of white rice would be maintained as the world's biggest exporter of the grain tries to keep a lid on prices.