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Raise minimum support prices for pulses, remove export ban, says CEA Arvind Subramanian’s panel

Giving paramountcy to increasing domestic pulses output, a committee headed by chief economic adviser Arvind Subramanian on Friday recommended hikes in minimum support prices (MSP) for key pulses besides suggesting creation of an institution through public-private partnership for procurement of lentils from farmers.

By: | New Delhi | Updated: September 17, 2016 6:41 AM

 

In the report, the committee, set up in the context of the recent spike in prices of pulses, urged the government agencies like Food Corporation of India (FCI) and Small Farmers Agri-Business Consortium to procure kharif sown pulses immediately from farmers.

In the report, the committee, set up in the context of the recent spike in prices of pulses, urged the government agencies like Food Corporation of India (FCI) and Small Farmers Agri-Business Consortium to procure kharif sown pulses immediately from farmers.

Giving paramountcy to increasing domestic pulses output, a committee headed by chief economic adviser Arvind Subramanian on Friday recommended hikes in minimum support prices (MSP) for key pulses besides suggesting creation of an institution through public-private partnership for procurement of lentils from farmers. It also suggested elimination of export ban on pulses and stock limits.

“More generally, the use of trade policy to control domestic prices, which induces policy volatility, should be avoided,” the panel said. It recommended cultivation of locally developed GM pulses varieties and hinted at the desirability of lifting the ban on futures trading in farm commodities.

“Enhancing domestic productivity and production rapidly and sustainably is the only reliable way of minimizing this volatility (in prices), and safeguarding the interests of farmers and also consumers,” the committee in its report titled ‘Incentivising pulses production through MSP and related policies’ stated.

It recommended raising MSPs of tur/arhar and urad by 19-20% to Rs 6,000/qtl for next kharif, and chana MSP by 17% to Rs 4,000/qtl for 2016-17 rabi crop.

In the report, the committee, set up in the context of the recent spike in prices of pulses, urged the government agencies like Food Corporation of India (FCI) and Small Farmers Agri-Business Consortium to procure kharif sown pulses immediately from farmers.

The panel also sought weekly reporting of pulses procurement. “It’s vital to ensure that farm gate prices do not drop below MSP otherwise in the next season the farmers might switch back away from growing pulses,” Subramanian said. He also said that the Commission for Agricultural Costs and Prices (CACP) should comprehensively review its MSP-setting framework by incorporating risk and social externalities.

It said farmers may be given production subsidies of about Rs 10-15 per kg directly for growing pulses in irrigated areas.

Meanwhile, encouraged by the price spike, farmers have resorted to pulses sowing, taking the area under this crop to close to 145 lakh hectares till Friday for this kharif season . Area under tur has gone up by close to 40%, while urad and moong areas have risen 25% and 33%, respectively.

“Thanks to widespread rains this monsoon, we are expecting a bumper kharif crops. Besides, soil moisture has improved, boosting forthcoming rabi pulses output,” an official said.

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