The Government has created a buffer stock of 20 lakh tonnes of pulses and now it is grappling with the problem of distributing them. This has been revealed by Union Food and Consumer Affairs Minister Ram Vilas Paswan on Monday while highlighting his Ministry's achievements. The buffer stock was created to manage price volatility through buying from local and overseas markets using the Price Stabilisation Fund.
"Right now, we have around 20 lakh tonnes of pulses in buffer stock. 16.27 lakh tonnes has been procured locally and 3.79 lakh tonnes imported. There is one problem, how do we distribute it," Paswan told reporters.
Pulses production has gone up this year and farmers are not getting the right price. However, the higher output has helped retail prices cool down, he added. The problem, however, is distribution of the buffer pulses stock, he added.
The ministry is in talks with various states and agencies for sale of pulses from the buffer stock. It is planning to sell some quantities to the Defence and para-military forces as also to give to states, a senior Government official said.
Pulses output is estimated to be a record 22.40 million tonnes in the 2016-17 crop year ending June, as against 16.35 MT previous year. This would reduce the country's dependence on imports to some extent as demand-supply gap is 2-3 MT. On retail prices of 22 essential commodities tracked by the government, Paswan said they are stable and under control. "With GST and implementation of e-national agri-market, both farmers and consumers will benefit," he added.
It is interesting to note that despite creating a buffer stock, data on wholesale prices show that higher procurement as claimed by the government has failed to lift domestic prices. For instance, arhar (tur or red gram) is currently selling between Rs3,500 to Rs4,500 per quintal in wholesale markets in Gujarat, Karnataka and Maharashtra, lower than the government declared MSP of Rs5,050 per quintal. Presently, the government has fixed the MSPs based on production costs and makes purchases. Interestingly prices of some pulses fell below their minimum support prices (MSPs).
The fact that prices are below MSP despite a record buffer stock implies inadequate procurement in a bumper crop year. Moreover, duty free imports which surged in the last few months, coupled with stock limits imposed on domestic traders, have contributed to lower price realisation by farmers.