In order to ensure the stability of prices, the Central government has decided to raise buffer stock of pulses to 20 lakh tonnes from 8 lakh tonnes through domestic procurement and imports. The government believes this step will also encourage farmers to grow dals.
The Centre had created buffer stock of pulses to make market intervention and supply pulses at cheaper rates. Retail prices have fallen in the last few weeks and are currently in a range of Rs 115-170 per kg across major cities.
“The Cabinet Committee on Economic Affairs has approved the proposal of Department of Consumer Affairs on enhancing the buffer stock for pulses up to 20 lakh tonnes. The buffer stock will be built through domestic procurement and imports of 10 lakh tonnes each,” an official statement said.
The requisite funds for this operation would be provided through the ‘Price Stabilisation Fund’ Scheme of the Department.
“The exercise will ensure a stable price regime for pulses and will also encourage domestic farmers to increase production of pulses,” it added.
For creating the additional buffer stock, the domestic procurement would be undertaken by the central agencies namely, FCI, NAFED and SFAC, at the prevailing market prices if the prevailing market prices are above Minimum Support Prices (MSP), and at MSP, if otherwise.
In addition, state governments may also be authorised, wherever possible, to undertake the procurement in a manner similar to decentralised procurement of food grains.
Import of pulses to meet the buffer stock requirements would be undertaken through government-to-government contract and/or spot purchase from the global market through designated public sector enterprise of Department of Commerce.
India’s pulses production fell to 16.47 million tonnes in 2015-16 crop year (July-June) from 17.15 million tonnes in the previous year. Pulses output had remained low in the past two crop years due to drought, resulting in spike of retail rates.
However, production is expected to rise to 20 million tonnes in 2016-17 as farmers have grown pulses in larger area this year following good monsoon, high market prices and sharp increase in the minimum support price.