Record production pushes greengram prices below MSP
08 September 2016
A record production of summer-sown pulses this year has resulted in dragging down prices of the protein-rich food grains to levels below government's procurement prices as the government agencies have failed to intervene so far.
The market prices of the new greengram (moong) crop have fallen below the minimum support price in the major producing states of Karnataka, Maharasthra and Madhya Pradesh, raising the hackles of farmers.
Last year's sharp rally coupled with the government's offer of price support had prompted farmers to increase area under cultivation.
Higher output by the world's top consumer and importer of pulses could help India, Asia's third-biggest economy, rein in its food price inflation that hit a near two-year high in July.
The inflation was feeding on double-digit annual increases in prices of sugar, vegetables and pulses. The government was hoping to cash in on the rising prices of pulses, which would act as an incentive for farmers to produce more.
The centre also announced a support price of Rs5,225 per quintal for moong, which also includes a bonus of Rs425 to farmers.
Sporadic farmers' protests have broken out in Dharwad and are likely to spread to other parts of the state as beleaguered growers seek to attract the Government's attention to their plight.
Food Corporation of India (FCI) and NAFED has also been tasked with the job of procuring pulses from farmers for the buffer stock. The agencies were to start procurement of moong at the MSP on 31 August, but there has been no action on the ground.
India's output of summer-sown pulses is estimated to have hit at a record 7.8 million tonnes this year, up 40 per cent from a year ago, according to the India Pulses and Grains Association.
In the absence of government procurement at support prices, the sudden fall in pulses prices that have hit record highs last year, could act as a disincentive for farmers, says trade body sources.
The price of green, black and red gram hit record highs earlier this year on the back of a fall in output in 2015. Prices have been softening with ample rains prompting farmers to cultivate more.
A Hindu BusinessLine report quoting Chamarasa Malipatil, president of the Karnataka Rajya Raitha Sangha (KRRS) said moong has been trading below the support price across the state for over a month.
Increased production combined with a spike in imports could dampen prices of pulses in the market, say farmers.
Moong prices in Maharashtra, where a bigger crop is expected, have been ruling in the range of Rs4,800-5,000 per quintal, APMC sources said.
The rebound in the monsoon, and high prices ahead of the planting season coupled with an increase in support price had prompted farmers to bring in more area under pulses this year. Farmers planted pulses in 142 lakh ha, almost 33 per cent higher than last year. Pulses production is expected to be around 20 million tonnes this year.