NAFED plans to convert a fifth of its raw chana stocks to dal amid surplus

New Delhi: The National Agricultural Cooperative Marketing Federation of India (Nafed) plans to convert 20% of its raw chana stocks to chana dal (gram or Bengal gram) and supply it in the retail market, two government officials said. The development comes at a time when the government has huge quantities of chana and lower stock of other pulses than strategic buffer requirement.

Currently, Nafed has about 3.6 million tonne (MT) of chana in stock, including 3.3 MT procured under the price support scheme (PSS) by the agriculture ministry this year.

The surplus is a result of higher procurement over the last two years due to lower market prices amid record high production. As per second advance estimates of food grain output by the agriculture ministry, production of chana in 2022-23 (July-June) is pegged at 13.5 MT, almost the same as last year.

Due to higher production this year, too, chana prices have remained below the minimum support price of ₹5,335 a quintal, leading farmers to sell their produce to the government’s procuring agency Nafed. This has created a buffer stock of 4.27 MT, comprising all five domestic pulses as well as imported stocks, against the strategic norm of 2.3 MT.

In Delhi’s Lawrence Road market, raw chana varieties from Rajasthan, Madhya Pradesh and Maharashtra varieties sold for ₹5,100-5,125 a quintal, according to market sources.

“Converting 20% of its raw chana stocks into dal is an experiment NAFED is looking at,” said one of the government officials. “We have been allocating raw chana to states and they have been disposing it in the raw form in the market. Other than releasing raw chana, Nafed is considering milling the raw chana and releasing it in the dal form."

"Whether it will be released to states or to the open market is not concrete yet. It could be sold in the open market or given to the retailers,” the official added.

The 20% conversion of raw chana will create about 370,000 tonne chana dal which may be disposed under Mid-Day Meal (MDM), Prime Minister's Overarching Scheme for Holistic Nutrition (POSHAN) and Public Distribution System (PDS). However, Nafed has highlighted some challenges on the implementation of the proposal. 

Queries sent to NAFED and the Department of Consumer Affairs, Food and Public Distribution, asking about implementation risks remained answered till press time.

The government has been giving out chana to states and union territories at a discounted rate for almost a year now to liquidate its stocks as pulses cannot be stored for more than a year. Recently, the Department of Consumer Affairs increased discount rate to ₹15 a kg to the prevailing market price from ₹8 per kg to step up liquidation.

The Cabinet Committee on Economic Affairs (CCEA) in August last year had approved allocation of 1.5 MT chana to states and UTs at a discounted rate to be utilised for various welfare schemes on a “first come, first serve” basis.