It takes little for the world to change. While pulses prices had skyrocketed since early this year, forcing the government to step up imports and the Reserve Bank of India to revise its inflation projections, lentils have of late turned cheaper across key markets and now, as the kharif crop has just begun to arrive, the farmgate price for moong has fallen steeply, necessitating the government to intervene and start minimum support price (MSP) operations. The Centre has asked farmers’ cooperative Nafed and Food Corporation of India (FCI) to immediately begin procurement of moong and other pulses from farmers especially in Karnataka, Maharashtra, Telangana, Andhra Pradesh, Madhya Pradesh, Rajasthan and Uttar Pradesh. Usually, MSP operations begin in October but with market intelligence suggesting a steep fall in prices in anticipation of a bumper kharif crop, Nafed and FCI are stepping in right away.
Pulses inflation, as gauged by the Consumer Price Index, rose an annual 27.5% in July, pushing the food inflation to 8.4% and overall retail inflation to just above 6%, the upper end of the government’s target range. As reported by FE earlier, the prices of these protein-rich staples have fallen over the last few weeks by almost a quarter.
Sources told FE that with more than a 36% increase in area under moong during this kharif season and early arrivals of the lentils in major markets, the price has dropped to around Rs 4,500 per quintal against the MSP of Rs 5,225 per quintal (including Rs 425 bonus) announced by the Centre in June, when sowing was yet to commence. According to a Nafed official, the cooperative has identified 46 “vulnerable” centres in Maharashtra and Karnataka where moong prices have fallen below MSP for procurement activities.
Nafed will open at least 18 centres in these states for purchase of moong from farmers under the price support scheme (PSS). Under PSS, the government assigns designated agencies like FCI and Nafed to procure agricultural commodities from farmers at MSP and the the government reimburses these agencies if they incur losses when they sell the commodity in the open market.
When prices of pulses hardened in February-March this year, the government went into a huddle and later clinched long-term deals for cultivation of the lentils in Mozambique and Myanmar.
According to agriculture ministry data, the kharif sowing of pulses so far this season has been 33% higher than last year. FCI, which usually procures rice and wheat from farmers at MSP, has also been assigned with the task of procuring pulses, starting this kharif season (earlier, this job was assigned exclusively to Nafed).
Last week, chairing the inter-ministerial committee meeting on prices, department of consumer affairs secretary Hem Pandey had said pulses procurement centres including mobile centres should be arranged near farmgates. “Wide publicity should be given to the procurement price — MSP plus bonus, procurement schedule and to the locations of the centres so that farmers get benefit of the initiative,” he had said.
The area under tur has gone up by 47% this season while urad and moong areas have risen 27% and 36%, respectively. “Thanks to widespread rains this monsoon, we are expecting a bumper kharif crop. Besides, soil moisture has improved, boosting forthcoming rabi pulses output,” an official said. The official said the pulses production is likely to reach 20 million tonnes in the 2016-17 crop year (July-June) from 17 mt reported in both 2013-14 and 2014-15.