Farmers sell pulses at a loss as wholesale prices dip below MSP
New Delhi: Wholesale prices of just harvested kharif pulses have dropped below the government’s minimum support prices (MSP) despite a lower crop output, forcing farmers to sell their produce at a loss in states such as Rajasthan.
For instance, price data from wholesale markets available on the Agmarket website showed that on Monday, farmers in Ajmer sold moong (green gram) at an average price of Rs4,050 per quintal, 27% lower than the government announced minimum support price (MSP) of Rs5,575 per quintal. Further, wholesale prices of moong are also 29% lower than the costs of production (including imputed rent and interest costs on owned land and capital) at Rs5,700 per quintal calculated by the Commission for Agricultural Costs and Prices (CACP) under the agriculture ministry.
Urad (black gram) sold at a modal price of Rs3,700 per quintal in Rajasthan’s Baran district on Monday is 32% less than the MSP of Rs5,400 per quintal and significantly lower than the comprehensive costs of cultivation at Rs4,517 per quintal calculated by CACP.
According to experts and traders the prices are lower despite a 7.5% drop in estimated production of kharif pulses in 2017-18 (year-on-year) as ample stocks are available from the previous (2016-17) crop season.
“The government is a seller in the market now as it is offloading the pulses it bought last year for the buffer stock,” said Pravin Dongre, chairman of the India Pulses and Grains Association. “The ban on import of pulses and allowing exports will take time to lift domestic wholesale prices as Indian traders have to recreate the export market,” Dongre said, adding, “millers of pulses are keeping a low inventory due to uncertainties around the goods and services tax (GST) and chances of a price recovery is limited in the next few months.” India currently has large stocks of pulses as the country harvested a bumper crop of 23 million tonnes in 2016-17 while it also imported a staggering 6.6 million tonnes. India consumes between 22-24 million tonnes of pulses in a year.
“In Rajasthan, farmers are complaining that there aren’t enough buyers in the market. Although the state government has opened procurement centres, it has also fixed a limit of 200 kg procurement per acre while actual productivity is more,” said Siraj Hussain, former agriculture secretary and currently a fellow at the Delhi-based Indian Council for Research on International Economic Relations.
Hussain, who visited some wholesale markets in Rajasthan last week further said in Bundi, wholesale rates of urad fell from Rs4,500-Rs4,700 per quintal a month ago to Rs3,200 to Rs3,600 per quintal now. He added that other than pulses, soybean, a major oilseed crop, is also selling at Rs2,700 per quintal, lower than the government announced MSP of Rs3,050 per quintal.
Falling crop prices were a major reason behind farmers’ protests since June this year. The protests which began in Maharashtra and Madhya Pradesh spread to other states like Chhattisgarh, Rajasthan, Haryana and Gujarat with demands of remunerative crop prices and a waiver of farm loans. In September, Rajasthan set up a committee to suggest a possible loan waiver scheme for farmers, after states like Uttar Pradesh, Maharashtra, Punjab and Karnataka announced debt relief schemes.