With mandi prices of soybean ruling below the minimum support price (MSP) of Rs 4,892/tonne, farmers’ cooperative Nafed and National Cooperative Consumers’ Federation of India (NCCF) will purchase the oilseed from farmers at the minimum support price (MSP) in Madhya Pradesh, the biggest producer of the item in the country.
The agriculture ministry on Wednesday approved procurement of 1.36 million tonne (MT) of oilseed purchase at MSP under the price support scheme (PSS) in Madhya Pradesh while last week the centre had approved purchase of 1.56 MT of soybean in Maharashtra (1.3 MT), Karnataka (0.1 MT) and Telangana (0.05 MT).
The agencies would commence procurement in key producing states soon. Agriculture minister Shivraj Singh Chouhan said that recently the farmers of Madhya Pradesh were worried as soybean was being sold at prices lower than MSP.
Trade estimates said that Madhya Pradesh and Maharashtra last year had 44% and 40% share respectively in the country’s soybean output.
Sources said that robust crops prospects and cheaper imports of edible oil due to low tariff has impacted mandi modal prices of key kharif oilseed – soybean which is currently ruling at around Rs 4376/quintal, around 10% below the MSP in the key producing states of Madhya Pradesh, Maharashtra, Karnataka and Telangana.
“There is no target for volume of soybean procurement under PSS as it depends on the market rate in each state,” an official said.
In the last rabi season, despite having a record mustard production of 13.16 MT in 2023-24 crop year (July-June), the mandi prices were ruling below the MSP and the government agencies had purchased 1.2 MT of mustard from the farmers in key producing states of Haryana, Madhya Pradesh, Rajasthan and Uttar Pradesh.
Soybean is sown in 12.51 million hectare (MH), up 9% compared to previous year. The total oilseed variety sown this season according to the agriculture ministry has been higher than last five years’ average of 12.29 MH.
According to Soybean Processors Association of India (SOPA), the output of oilseed variety in the 2023-24 crop year was estimated at 11.9 million tonne (MT), while the agriculture ministry has estimated output of oilseed variety at 13.05 MT.
India is the world’s second-largest consumer and number one vegetable oil importer. The country meets about 58% of its consumption of around 24 MT annually through imports.
Currently, crude palm, soybean, and sunflower oil imports attract only a 5% agri infra cess and a 10% education cess, resulting in a total tax incidence of 5.5%. Because of record imports, the domestic prices of edible oil varieties such as mustard and soybean have been impacted, officials said.
Earlier, the Commission for Agricultural Costs and Prices (CACP), had recommended that the MSP for the 23 crops to the government, had suggested extending the national mission on edible oils to major oilseeds such as mustard, soybean, sunflower, groundnut, etc. and ensure higher participation of the private sector in procurement operations of oilseeds.