Govt starts buying tur dal at market price for buffer
By Sandip Das
To ensure that farmers’ get remunerative prices and build the buffer, farmers’ cooperative Nafed and National Cooperative Consumers Federation (NCCF) have commenced procurement of tur dal at market prices, which are 42% above the minimum support price (MSP).
Sources said only around 2000 tonne of tur dal has been purchased in Madhya Pradesh and Andhra Pradesh from the farmers by Nafed and NCCF at the market price. The procurement is expected to rise in next two months, the peak period for arrivals of pulses variety.
During February 15 – April 15, the two agencies are aiming to purchase 0.4 million tonne (MT) of tur for buffer stock under the price stabilisation fund. The agencies have registered more than 0.2 MT farmers for the direct purchase scheme.
The dynamic pricing model of purchase from the farmers for the pulses is accordance with the government’s market intervention initiative to buy onions from the farmers at the market price for buffers.
Trade sources told FE that while farmers are getting prices above the MSP from the trader because of domestic production pulse variety is not sufficient to meet demand, the government’s direct purchase from the farmers is not ‘attractive’ enough.
For the last few years, Nafed has been unable to carry out MSP operations for creating a buffer for tur dal because of higher prices. The mandi prices of tur dal on Wednesday at Latur, Maharashtra, the hub of the trade, was ruling around Rs 10,000 – Rs 10,200/quintal against the MSP of Rs 7,000/quintal for the 2023-24 season (July-June).
The official said that purchase of pulses varieties above MSP will give a signal to the farmers to augment production which would reduce the country’s import dependence.
In the 2023-24 crop year (July-June), the agriculture ministry has projected tur dal production of 3.42 MT, which is similar to the output for the previous year. However two meet domestic demand, India imports around 0.9 MT of tur dal from mostly Mozambique, Malawi and Myanmar.
Earlier India had signed an MoU with Mozambique for import of 0.2 MT of tur annually for five years when the retail prices of tur skyrocketed to Rs 200 a kg in 2016. This MoU was extended for another five years in September, 2021.
In 2021, India entered into MoUs with Malawi and Myanmar for the import of 50,000 tonne and 0.1 MT of tur per annum, respectively, till 2025. The official said that within three days of purchase of the commodity, the amount will be transferred to farmers bank account directly.
Retail inflation in tur last month was 42.43% on year and the inflation was in double digits since December, 2022 because of lower output and robust demand.
This article has been republished from The Financial Express.