1.5L tonne buffer stock for pulses
The Cabinet approved creating a 1.5L tonne buffer stock of pulses to deal with the widening pulse shortage in India. Under the scheme, this year 50,000 tonnes from the kharif crop and 1 lakh tonnes from the rabi crop will be procured to create the buffer stock. Rs.1100 crore will be allocated from the Price Stabilization Fund and Price Support Scheme for this initiative.
There was fear of drought in India, the largest importer of pulses, which led to a increase in prices of pulses in the world market by 30% to 40% during the last two to three months. Pulses prices in India rose by 50% to 60% in a year. Indian importers had signed contracts for imports of yellow peas and lentils from Canada.
Pulses prices have risen due to a fall in domestic output by about 2 million tonnes, from 19 mt to 17.20 mt in 2014-15 crop year (July-June) due to deficient monsoon last year and unseasonal rains.
The Government offered to pay an extra Rs. 2,000 a tonne to pulse growers over government-set support prices. The support prices were fixed at Rs. 44250, Rs. 46500 and Rs. 44250 for a tonne of the three main varities of lentils (pulses). Government took these measures to bring the prices of pulses down in the Indian market.
India received the first tranche of 1,872 tonnes of Tur dal. The remaining consignment of 5,000 tonnes of tur (pulse) has already been ordered for the import. The consignment of 5,000 tonnes of urad (pulse) from Myanmar would reach India by October 20. Additional bids for importing 5000 tonnes of tur would be opened on 1 October.
India is the largest producer and importer of pulses. It produces about 170-180 lakh Metric Tonne of pulses and imports 36 Lakh Metric Tonne of pulses every year.
Pulses prices continued to increase by another 40% to 50% as compared to July. Pulses like tur, moong and urad were trading at Rs.180-200/Kg. The prices were Rs.100-120/Kg in July 2015. Food merchants predicted that prices would cross Rs.250 mark by end of the year. The sellers said that the price rise had resulted in the reduced consumption of pulses.
Responding to concerns over rising prices, government argued that it was trying hard to contain prices by importing after the pulses price rose upto Rs.187/ Kg. MMTC had contracted to import 5,000 tonnes each of tur and urad dals. Government invoked the Rs.500 crore stabilisation fund to pay for transportation, handling, milling and processing to reduce cost of imported pulses.
The government hiked the Minimum Support Price (MSP) for pulses that will grow in the rabi season in a bid to encourage farmers to grow these crops. MSP is the minimum price at which the government would buy these pulses from farmers. The MSP of channa and masur were increased by 8% per quintal with an additional bonus of Rs.75 per quintal.