The Cabinet Committee on Economic Affairs has put on hold the minimum support price (MSP) approved earlier for pulses — arhar, moong and urad — in the kharif season 2012-13.
According to officials, the ministry of agriculture has been directed to rework the MSP for arhar and moong. The Committee on Agricultural Costs and Prices (CACP) has been asked to send a fresh proposal in this regard to the ministry. Officials said the MSP of pulses needed reworking due to the declining trend of their prices in the market and expectation of robust production, close to 18.1 million tonnes last year; in addition, in anticipation of demand, there have been imports. The earlier high prices had hit retail consumption, leaving a lot of stock in the market.
Hence, supply was more than enough to meet demand, which takes off the price pressure. In this scenario, said sources, the high MSP suggested would create an inflated base. This would push up the burden on the exchequer, already facing strained financial conditions, officials said. It would create a high base for the decision on next year’s MSP, too, Hence, the need to rework it, they said.
Earlier, the CCEA had approved an MSP of Rs 4,300 per quintal for urad, against Rs 3,300 per quintal last year. For arhar and moong, the ministry of agriculture had backed the CACP recommendation, of Rs 4,000 per quintal for arhar as against Rs 3,200 earlier, and Rs 4,500 per quintal for moong, as compared to Rs 3,500 earlier. The current market price for arhar is Rs 4,125-6,051 per quintal across the country. Moong is Rs 3,500-3,700 per quintal and urad is Rs 2,356- 6,400 per quintal.
The food ministry had firmly opposed the proposal for a bonus to growers in at least those commodities where there was government procurement, such as rice and pulses.
The MSP is the floor price which sets the base for market prices and procurement.