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Business News/ News / India/  Govt to buy 500,000 tonnes masur at market rate to boost buffer stock

New Delhi: The Union government’s consumer affairs department is planning to procure 500,000 tonnes of masur at market rates, an official aware of the matter said, after failing to procure enough lentils at the minimum support price (MSP).

The agriculture ministry purchases commodities at MSP under the price support scheme (PSS), while the consumer affairs department purchases them at market prices through the price stabilization fund (PSF).

The agriculture ministry has already procured 69,000 tonnes of masur against the season’s target of 334,000 tonnes. With this, central stocks have touched around 70,000 tonnes; plus 800 tonnes under PSF from last year. The strategic buffer requirement for masur is 200,000 tonnes, the official said.

Near-zero procurement of pulses such as tur and urad during the season has put pressure on overall central buffer stocks of pulses. However, the government has more than enough stocks of pulses, given the surplus procurement of chana (gram) this year. In case sufficient quantity of masur is not available at the MSP of 6,600 per quintal, the consumer affairs department, through agencies like National Agricultural Cooperative Marketing Federation of India, will procure 500,000 tonnes of the pulse at market prices from domestic sources, imports, or both, the person cited earlier said. Whole masur is currently trading at 6,550, 6,650 and 5,600 per quintal in the key wholesale markets of Rajasthan, Uttar Pradesh and Madhya Pradesh, according to spot trade sources.

In the 2023-24 rabi marketing season that started in March, the agriculture department could not procure the required amount of masur under PSS, despite higher production that brought down market prices. The agriculture ministry’s third advance estimates pegs masur production in 2022-23 (July-June) at 1.58 million tonnes (mt) against the previous season’s estimated 1.27 mt. “Farmers may be holding back their produce in anticipation of remunerative prices of masur amid skyrocketing prices of pulses like tur," a Delhi-based analyst said.

Masur makes up 6-7% in India’s total pulses basket. The government is trying to shift consumption of some pulses like tur to masur and chana amid lower production of tur. In the ongoing rabi marketing season, the agriculture ministry has been able to procure surplus chana. With 3.2 mt chana procured under PSS, the government’s total pulses stock, at present, is close to 4.2 mt, including PSF stocks of 517,000 tonnes. The buffer norm under PSF is around 2.3 mt. Though the heavy stocks of pulses are lying with the agriculture ministry, the consumer affairs department can access the stock whenever required.

Emails sent to the departments of consumer affairs, and food and public distribution remained unanswered till press time.

Pulses remain a key source of protein across India. Through PSF, the government regulates the price volatility of major agriculture and horticulture commodities.

It also maintains a strategic buffer stock that would discourage hoarding and unscrupulous speculation.

The buffer stock is primarily used for the Midday Meal Scheme, Integrated Child Development services and the Public Distribution System to ensure subsidized supplies to the poorest.

States such as Tamil Nadu and Andhra Pradesh still distribute pulses under PDS. In the year ahead, the government is focusing on improving domestic production of pulses.

Puja Das
Puja Das is a New Delhi based policy reporter covering food, farm, fertiliser, water, and climate policies for Mint. Puja reports on farmers' distress and how the agriculture sector is impacting India's rural economy and policy initiatives to help meet the pledges made at COP27. Puja holds a post-graduation degree in Broadcast Journalism from the Indian Institute of Journalism & New Media, Bangalore.
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Updated: 30 May 2023, 11:07 PM IST
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