The increase in the last kharif acreage for pulses following a spurt in prices in the previous year has resulted in oversupply and a consequent price crash now, forcing the government to step up minimum support price (MSP) operations, a rarity for these crops. Retail prices of arhar, for instance, are 30-40% lower than a year ago in key cities and, according to market observers, could fall further (see table).
With the Centre jittery over possible distress sales by farmers in many locations, it has asked states also to supplement procurement of arhar, a key pulse variety that is generally expensive.
In a recent communication to states, consumer affairs secretary Hem Pande stated that although agencies such Food Corporation of India (FCI), Small Farmers Agribusiness Consortium (SFAC) and farmers’ cooperative Nafed have been purchasing pulses from farmers at MSPs for a month, the state government agencies must also step in immediately to procure at least 10,000 tonnes.
“As significant arrivals of tur or arhar have started…you may direct the state agencies to procure tur or empower state marketing federations or primary cooperative societies by providing them with a revolving fund for procurement of tur as per quality specification approved under the Price Stabilisation Fund (PSF),” the communication stated.
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Meanwhile, government agencies such as Nafed, FCI and SFAC at present are purchasing kharif pulses like arhar, urad and moong across key producing states including Telangana, Maharashtra, Madhya Pradesh, Gujarat and Karnataka as prices have fallen below MSPs of around R5,000 per quintal in mandis.
Nafed, the nodal agency for pulse procurement, has already purchased 70,000 tonnes of tur from farmers. The farmers’ cooperative is targeting purchasing 4 lakh tonnes of the lentil in the ongoing kharif marketing season while FCI and SFAC have been given a procurement target of 1 lakh tonnes each. Kharif pulses procurement would continue till the middle of March.
“After we intervened by purchasing quality tur from farmers, the mandi prices of this and other pulses have been stabilised around MSP across mandis,” Nafed managing director Sanjeev Kumar Chadha told FE. Besides, the Maharashtra government has instructed the agencies to cancel contracts of those agents in the mandis who try to purchase pulses from the farmers below MSP.
The current situation is in sharp contrast to what was prevailing a year ago when prices of pulses, especially that of tur, skyrocketed, forcing the government to step up imports and announce the abolition of import duties. The government had also announced the creation of buffer stocks of 2 million tonnes (mt). Chadha of Nafed said that the three agencies would be purchasing around 1 mt of pulses for the buffer stock in the current kharif season.
According to the first advance estimated released by the agriculture ministry in September last year, production of arhar is expected to be at an all-time high of 4.29 mt in 2016-17, against the targeted 3.62 mt. Arhar output stood at 2.46 mt in 2015-16 and at 2.81 mt the year before that. The agriculture ministry had stated that pulses output during 2016-17 crop year (July-June) is expected to be around 20 mt to 21 mt. Drought in 2014 and 2015 had brought down the pulse production to 16.47 mt in 2015-16 and 17.15 mt in 2014-15. The country recorded a production of 19.25 mt in 2013-14.