Agri Business

As procurement remains low, MSP offers little for growers

Rutam Vora Ahmedabad | Updated on March 24, 2019 Published on March 24, 2019

India said the calculations of MSP made by the US and Canada were incorrect and stressed that its price support programme for pulses was only to ensure nutrition supply for 195 million poor people.   -  Dhiraj Singh;Dhiraj Singh

States not moving quickly enough to buy produce from farmers, says Nafed

The Centre’s effort to boost farmers’ income by announcing an up to 25 per cent increase in the minimum support prices (MSP) of kharif pulses and oilseeds doesn’t seem to have achieved its goal.

According to the latest data from the National Agricultural Cooperative Marketing Federation of India (Nafed), in seven of the 11 growing States, the agencies could not procure even half of the quantity sanctioned by the Centre’s Department of Agriculture, Cooperation and Farmers Welfare (DAC&FW), prompting farmers to sell their crops at abysmally low prices in the open market.

In major pulses growing States such as Uttar Pradesh, Gujarat, Maharashtra, Andhra Pradesh and Tamil Nadu, the procurement activity remained way below expectation. Similarly, barring Gujarat, no State could procure even one-third of the approved quantity of kharif oilseeds. Odisha reported nil procurement for both kharif pulses and oilseeds.

Out of the total estimated kharif oilseeds output of 111 lakh tonnes for 2018-19, the DAC&FW had sanctioned procurement for 20 lakh tonnes. But, as on March 21, the actual procurement stood at only 7.3 lakh tonnes, which is barely a third of the approved quantity. For pulses, against the production estimate of 72.81 lakh tonnes, the DAC&FW had sanctioned a procurement of 17.6 lakh tonnes. At 9.88 lakh tonnes, a little more than half the quantity was procured.



Low market prices

The market prices for most kharif crops ruled much lower than the MSP. Moong, for example, hovered at ₹4,500-4,800 a quintal against the MSP of ₹6,975.

“State governments aren’t moving quickly,” remarked Nafed Chairman VR Boda. “The Centre has announced the MSP but now it is up to the State governments to work in coordination with Nafed to implement PSS (price support scheme) operations.”

Even the rabi procurement has been disappointingly low in most States. Nafed data shows that barring Telangana, Tamil Nadu and parts of Rajasthan, procurement of rabi oilseeds, including sunflower and groundnut, remained abysmally low.

P. Chengal Reddy, farmer leader and advisor to the Consortium of Indian Farmers Associations (CIFA), said that “the government increases the MSP but procurement doesn’t happen. And, we keep importing edible oils. When farmers are producing more, why should we import?”

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Published on March 24, 2019
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