Talks on for MSP prop to pulses, oilseeds

Food ministry, Nafed want full subsidy for this mandate would also like state governments to bear part of the burden

Work has begun to see if it’s possible to entirely subsidise a National Agricultural Cooperative Marketing Federation of India Ltd (Nafed) programme to keep up the prices of oilseeds and pulses.

Nafed was recently told to buy the entire market stock of pulses and oilseeds at the government-set minimum support price (MSP) if these dip. Food Corporation of India has a similar mandate in the case of rice and wheat.

The Union ministry of food and consumer affairs has started consultations with other ministries on how to subsidise Nafed to do this. Currently, there are two schemes under which procurement is done of these commodities. One is by the National Cooperative Consumers Federation of India Ltd (NCCF), which distributes pulses and edible oil at a subsidised rate to the public distribution system. NCCF is reimbursed at the rate of 25 per cent of the cost of procurement. There is also a scheme, where Nafed procures and distributes pulses but is reimbursed only 15 per cent of the procurement cost.

Since neither scheme ensures the agencies in question can recover their cost of procurement and distribution, the ministry and Nafed want this ensured, said officials.

While the ministry of food will run the scheme, it needs concurrence from other ministries, especially its finance counterpart. The Centre has also started discussions with states from where the procurement is to be done, to share the cost of the subsidy if all the expenses are to be reimbursed.

Official sources said this was one reason why the government had held back the MSP decision on pulses for 2012-13. Officials said this needed reworking, due to the declining trend in their prices and expectation of robust production, close to the 18.1 million tonnes of 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. The monsoon’s revival, said officials, augured well for pulses’ sowing, since it acts as a substitute crop for many farmers if there are delayed monsoon conditions.

For arhar and moong, the ministry of agriculture had backed the recommendation of the Commission for Agricultural Costs and Prices, of Rs 4,000 per quintal for arhar as against Rs 3,200 last time, and Rs 4,500 per qtl for moong, as compared to Rs 3,500 earlier.