Price tags are seen on the bags of pulses that are kept on display for sale outside a shop at a market in Mumbai, India January 31, 2017. REUTERS/Shailesh Andrade - RTX2YYDV
The government is planning a mega sale of pulses to liquidate large stock after a bumper pulses output and piling stocks of pulses procured from agencies like Nafed in the last two years, according to a report by Financial Express.
The procurement for Kharif 2018-19 may kickstart over the next couple of months, but the Centre has been grappling with excess pulses stock. The government is expected to announce a policy to allocate pulses to states at subsidised prices to make space for new procurements, the report said.
The states will mill these raw pulses and distribute it through a public distribution scheme (PDS).
Senior officials told the paper that the government would announce a scheme for introducing pulses under PDS in 200-odd districts that are ranked low in terms of nutritional indicators.
Under this mega sale, the Centre will provide pulses, especially arhar and gram (chana), to states at Rs 35 per kg compared to the average cost of procuring pulses of Rs 50 per kg (for Nafed). It could cost the Centre about Rs 8,000 crore for implementation of such a scheme.
The central government is planning to provide 70 million households in selected districts with 2kg pulses monthly from the excess output at a price which is at least 50 percent cheaper than market prices, the report said.
Currently, 5kg each of rice or wheat is provided under the National Food Security Act to 81 crore beneficiaries across the country.
While the move is a positive initiative for various households in ‘poor’ districts of the country, a proper implementation seems to be a challenge.
The Centre may have to streamline distribution through PDS at the state level to ensure that proper minimum support price (MSP) is imparted to farmers, nutritional requirements of many regions are met and agencies such as Nafed do not hold excess pulses stocks, the report said.
The rising pulses output seems to be one of the major factors behind the piling up of stocks.
India's pulses output has been on the rise over the past couple of years. In FY18, India recorded pulses output at 24.51 million tonnes (MT), whereas in FY17, it was up 42 percent at 23.13 MT from the previous year's 16.35 MT. The jump was due to a hike in the MSP in 2016 and the government's move to procure pulses in key growing states including Maharashtra, Gujarat, Madhya Pradesh, Rajasthan, Andhra Pradesh and Telangana.
As a result of back-to-back record production years, retail prices have seen a sharp fall. Even though the lower prices have benefited consumers, huge inventories such as Nafed liquidated fast to ensure the farmers received a fair price for their output.
Nafed also bore the cost of procurement. Over the last two seasons — Kharif 2017-18 and Rabi 2018-19 — the Centre has spent close to Rs 30,000 crore for purchasing mostly pulses and oilseeds from 35 lakh farmers at MSP under the Price Support Scheme (PSS).
Under the PSS, the government provides remunerative prices to farmers for their produce, with a view to encourage higher production and to safeguard the interest of consumers by making available supplies at reasonable prices.
The move comes after Nafed recorded a low sale in the open market through e-auction. So far, only 0.38 MT of pulses has been sold through e-auction.
"With record output, there are substantial stocks of pulses available with traders as well as farmers. Thus, there has not been an encouraging response to selling of pulses by Nafed in the open market,” a senior official told the paper.