Contrary to what traders believe, agriculture cooperative Nafed will not sell mustard at a discount after the ongoing procurement season; rather it may sell the oilseed at a profit. The absence of private traders and processors have resulted in mandi prices of mustard ruling below MSP while the harvesting is nearly complete.
The average prices of mustard were 8-20% lower than its MSP of Rs 4,200 per quintal in major mandis of Rajasthan, Haryana, Uttar Pradesh, Madhya Pradesh and Gujarat during April 1-May 7, according to official data.
Production of mustard crop, the main oilseed of rabi season, is estimated at 8.4 million tonne in 2018-19, up from 7.5 million tonne a year ago.
“We are considering to fix a reserve price for mustard like the way benchmark rates fixed in case of wheat and rice under open market sale scheme. If this is approved by the government, traders will not be able to buy the crop below the rate in auction,” Nafed’s managing director Sanjeev Chadha said. “We will make sure that we will earn a profit from mustard.
The agency will start selling the crop after procurement is over.
Mustard procurement started by Nafed through its state partners began from March 15 and is scheduled to continue till June 30. Nafed is the nodal agency under PM-Aasha scheme for procurement of oilseeds and pulses to ensure that farmers get MSPs. The agency has purchased about 5 lakh tonne of mustard in those five states as of May 6 of over 16 lakh tonne approved for the MSP Support Scheme.
The food ministry early this month fixed the reserve price of wheat under the open market sale scheme (OMSS) at Rs 2,080/quintal, which is Rs 240 higher than MSP, during the procurement period April-June and announced Rs 55/quintal increase in each of the subsequent quarters. This is seen as a move to force private traders to buy from the mandis now instead of entirely depending on the government’s sale programme as the bulging stocks put pressure on the Food Corporation of India (FCI) to cut purchase.