To ensure that farmers get remunerative prices and build up the buffer, the government will soon start procurement of tur dal which is currently ruling above the minimum support price (MSP) through a ‘dynamic pricing’ formula.
Sources told FE that agencies such as National Cooperative Consumers Federation (NCCF) and farmers’ cooperative Nafed will purchase the pulse variety directly from farmers or primary agricultural credit societies at a price derived on the basis of prevailing mandi prices of one-week duration.
The official said that purchase of tur dal above MSP will give a signal to the farmers to augment production which would reduce the country’s import dependence. Similar mechanism of procurement will be followed for urad dal well.
The mandi prices of tur dal on Monday at Latur, Maharashtra, the hub of the trade, was ruling around Rs 9500 – Rs 9600/quintal against the MSP of Rs 7000/quintal for the 2023-24 season (July-June).
Officials said that due to a mismatch between production and consumption, mandi prices of tur have been ruling above MSP for the last couple of years. Nafed has been unable to carry out MSP operations for creating a buffer for tur dal because of higher prices.
The modal retail prices of tur, according to the department of consumer affairs rose by 33% to Rs 160/kg on Saturday compared to prices prevailing six months back.
The procurement above MSP is likely to be launched next month when kharif arrivals of the pulses variety usually peaks.
The official said that within three days of purchase of the commodity, the amount will be transferred to farmers bank account directly. The initiative to purchase pulses variety at market price will be supported by the Price Stabilisation Fund being implemented by the department of consumer affairs.
Sources said that the procurement price of tur will be calculated by taking the weighted average of maximum and modal prices in benchmark markets with 30% weight to maximum price and 70% weights to modal price.
As per the first advance estimate for 2023-24 season (July-June) by the agriculture ministry, tur output is estimated at 3.42 million tonne (MT), which is marginally higher than the previous year’s output.
Inflation in pulses category rose to 20.23% in November from 18.7% in October this year while arhar variety of pulses reported a price rise of 42%. India imported 0.9 MT of tur in 2022-23 while in the current fiscal (April-October), the imports have crossed 0.45 MT.
A major chunk of pulses varieties imported include tur, urad and masoor (lentils) and these pulses mostly sourced from Mozambique, Malawi, Tanzania, Myanmar, Canada and Australia.
Earlier India had signed an MoU with Mozambique for import of 0.2 MT of tur annually for five years when the retail prices of tur skyrocketed to Rs 200 a kg in 2016. This MoU was extended for another five years in September, 2021.
In 2021, India entered into MoUs with Malawi and Myanmar for the import of 50,000 tonne and 0.1 MT of tur per annum, respectively, till 2025.