Centre starts procuring soybean at MSP

Gujarat govt also plans to do so for groundnut, cotton; prices slide with bumper harvest

After many years, the central government had again directed its agencies to purchase soybean directly from farmers at the Minimum Support Price (MSP), with prices having crashed in many markets of Maharashtra.

Similar intervention is planned for groundnut seed by the government of Gujarat. In association with Nafed, the Centre’s cooperative marketing arm, it plans to buy 100,000 tonnes of groundnut seed from farmers from the coming week.

The Centre has fixed a soybean MSP of Rs 2,775 a quintal, including a bonus of Rs 100. For groundnut, Rs 4,220 a  qtl, with the same bonus, for the 2016-17 kharif marketing season; it is presently Rs 3,500-3,600.

In Gujarat, the state has decided to procure groundnut, cotton and pulses directly from farmers, with prices having dipped below the MSP. Initially, it will start procurement of groundnut, allotting Rs 100 crore for this from an emergency fund.  In 2013, the state government had procured about 100,000 tonnes of groundnut from farmers for the same reason, after bumper production.

“We have given the necessary directions to the civil supplies corporation, Nafed, Gujarat State Cooperative Marketing Federation, Gujarat State Co-Operative Cotton Federation and Cotton Corporation of India, to buy groundnut, cotton and pulses,” said Chiman Shapariya, agriculture minister of Gujarat.

The MSP for raw cotton (kapas) was fixed at Rs 4,160 a qtl; it is being traded at Rs 3,500-4,000.

Daily arrival of groundnut at wholesale markets is over 100,000 bags. According to market sources, it will go up to 160,000-175,000 bags by end-November. The Solvent Extractors’ Association of India (SEA) estimates groundnut production in Gujarat at three million tonnes in 2016-17, from 1.42 mt in 2015-16.

In soybean, officials say market rates have slumped to Rs 2,700-2,500 per quintal, against an MSP of Rs 2,750. In parts of Maharashtra, the rates are even lower. “A bumper harvest, along with sharp drop in soy seed demand due to a global slump in prices and a record drop in meal exports, have hit farmers hard,” said Rajesh Agarwal, former chairman of the Soybean Processors Association of India.  Soymeal exports dropped 44 per cent to 421,741 tonnes during April-September, first six months of this financial year, from the same period last year.

The estimate is for India’s 2016-17 soybean production to be an all-time high of 14.22 million tonnes, 66 per cent more than last year.

Pulses procurement

Government agencies have so far procured 34,547 tonnes of moong (green gram) and urad (black gram) directly from farmers this year, as their prices have also dropped below the Minimum Support Price, due to a bumper harvest. Output of pulses in the 2016-17 kharif season is estimated to be a record 8.7 mt, against 5.54 mt last year.