Narendra Modi govt looks to protect farmers as bumper crop on way, revives import duty on pulses

By: | Published: March 10, 2017 2:07 AM

According to second advance estimate released recently by agriculture ministry, the pulse production during 2016-17 crop year (July-June) is expected to increase by more than 35% compared to previous year’s output.

This is for the first time that the government agencies have procured arhar and urad from the farmers because of the gap between demand and supply and the retail prices are usually much higher than the MSP.

With Kharif farm gate prices of pulses, especially tur or arhar and urad, falling below the minimum support price (MSP) in mandis across key producing states, the government has decided to impose an import duty on pulses which was abolished more than a decade back. Sources told FE that to bridge the gap between demand and supply of pulses, the government had been pursuing a zero percent duty on imports since 2006. However, this year (2016-17), in anticipation of a bumper crop, the government has decided to restrict import in a bid to protect domestic farmers.
The farm gate prices of pulses like arhar and urad has been around R5,050 per quintal. This is for the first time that the government agencies have procured arhar and urad from the farmers because of the gap between demand and supply and the retail prices are usually much higher than the MSP.

According to second advance estimate released recently by agriculture ministry, the pulse production during 2016-17 crop year (July-June) is expected to increase by more than 35% compared to previous year’s output. Rabi or winter pulses such as channa have been sown in 15.97 million hectares, which is 11.15% more than last year (2015-16) and 8.14% more than last five year’s average. “We can’t allow farmers to suffer because of bumper pulses production thus we will be imposing an duty on pulses discouraging imports,” an official said.

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Following a high level meeting, it has been decided that farmers’ cooperative, Nafed, which has been carrying out procurement of Kharif arhar for building a pulses buffer stocks along with Food Corporation of India (FCI) and SFAC, will continue with its procurement operations for arhar, a key pulse variety which is generally expensive, beyond March 15. Currently, arhar is being procured by Nafed in key production states of Rajasthan, Madhya Pradesh, Karnataka, Andhra Pradesh, Telengana and Gujarat.

So far, the three designated agencies for pulses procurement have purchased close to 5 lakh tonne of arhar against the target of 6 lakh tonne for the current season. Along with other pulses like Kharif moon and urad, the three designated agencies have purchase close to a million tonne of pulses for buffer stocks.  Sources said following extention of Nafed’s procurement date, the farmers’ cooperative may end up procuring close to a million tonne of arhar for the buffer stocks by April 15. Meanwhile, the retail prices of arhar and urad have seen a sharp decline in the last four months or so (see table). The current situation is in sharp contrast to what was prevailing a year ago when prices of pulses, especially arhar and urad, skyrocketed. It forced the government to step up imports and announce abolition of import duties and creation of buffer stocks. With the Centre jittery over possible distress sales by farmers in many locations, it has also asked states also to supplement procurement of arhar.

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