Announce higher MSP for pulses, speed up procurement: CEA panel

In a bid to boost pulse output and check prices, the Chief Economic Advisor (CEA)-led panel on Friday asked the Centre to immediately announce higher minimum support price (MSP) of gram (chana) to Rs 4,000 a quintal for rabi 2016 and Rs 6,000 a quintal for both urad and tur for kharif season 2017.

The report also recommended that the government should procure pulses on a war footing, create buffer stock of 2 million tonnes, push states to delist pulses from Agricultural Produce Market Committee (APMC) and promote development of GM technologies. It also prescribed subsidies to farmers for growing pulses.

CEA Arvind Subramanian on Friday submitted the report titled 'Incentivising Pulses Production Through Minimum Support Price (MSP) and Related Policies' to the Union Finance Minister Arun Jaitley. The panel was set up in the wake of a recent surge in retail prices of pulses.

"It is the strong view of this report that enhancing domestic productivity and production of pulses rapidly and sustainably is the only reliable way of minimising volatility in pulse market and safeguarding interests of farmers and consumers," it said.

Among steps required to be taken immediately, the report further suggested that the government procurement machinery should be in high gear to ensure procurement of kharif pulses at this season's already-announced MSP.

"Announce MSP of Rs 40/kg for gram for rabi 2016 and MSP of Rs 60/kg for both urad and tur for kharif 2017 (adjusted for inflation between 2016-17). MSP for other pulses should be increased by the same per cent as calculated in this report for tur, urad and gram," it said.

For the kharif 2016, the government recently announced MSP for arhar (tur) at Rs 5,500 a quintal and Rs 5,050 for urad dal. In the case of gram, MSP for rabi 2015 was Rs 3,500, including a bonus of Rs 75 per quintal.

It also said MSP should be increased to Rs 7,000 per quintal in 2018 when short duration kharif tur is ready for commercialisation.

"Efforts to be made to give production subsidies to farmers for growing pulses in irrigated areas of about Rs 10-15 per kg to be given via DBT (direct benefit transfers)," it added.

The CEA report pitched for encouraging development of GM technologies to boost pulse productivity and production. It also said expeditious approval should be given to indigenously developed new varieties of pulses.

Furthermore, it suggested elimination of export ban on pulses and stock limits, and more generally, the use of trade policy to control domestic prices, which induces policy volatility, should be avoided.