Govt to buy more pulses in push for food security

According to a CCEA notification, the Centre can now procure up to 40% of pigeon pea (tur), black gram (urad) and plain lentil (masur) grown by farmers, up from 25% earlier, under its price support scheme (PSS) if market rates of these commonly consumed items fall below minimum support prices (MSP).

The cabinet committee on economic affairs (CCEA), chaired by Prime Minister Narendra Modi, on Wednesday approved two key measures to boost food security and cushion farm incomes, raising the Union government’s limit for purchase of three varieties of lentils and offering chickpea (channa) at a discount to states.

Govt to buy more pulses in push for food security (Unsplash)

According to a CCEA notification, the Centre can now procure up to 40% of pigeon pea (tur), black gram (urad) and plain lentil (masur) grown by farmers, up from 25% earlier, under its price support scheme (PSS) if market rates of these commonly consumed items fall below minimum support prices (MSP). MSPs are floor rates fixed by the Centre aimed at ensuring farmers do not sell at a loss.

The Union government will also offer up to 1.5 million tonne of chickpea, another essential pulses variety, from a federally held stockpile to states and Union territories at a discount of ₹8 over the issue price, or the subsidised rate at which each state sells to beneficiaries of the public distribution system (PDS).

Together, these measures, the government hopes, will stabilise prices, cushion farm earnings, calm markets and keep a lid on prices. Securing adequate food supplies is critical this year as the world battles one of the gravest food crises in decades due to supply disruptions and the Ukraine war.

In July, retail inflation eased for the third straight month, led by a decline in food prices. Despite slowing price growth, consumer inflation exceeded the Reserve Bank of India’s (RBI) target of 4% for the seventh straight month, according official data.

“CCEA has approved enhancement of ceiling on the quantity of procurement under PSS from existing 25% to 40% in respect of tur, urad and masur,” a Cabinet statement said.

While raising the ceiling for procurement is expected to add to the government’s emergency stockpile of pulses and support farm earnings, the decision to dispose of chickpea at a total earmarked cost of ₹1,200 crore comes in the wake of rising stockpiles of the item procured in previous years under the PSS scheme.

The PSS scheme is a federally funded programme to intervene in agricultural markets to help avoid distress selling by cultivators of mainly pulses and oilseeds. The government enters the market as buyer when rates crash below floor prices. By design, the scheme aims to improve prices for farmers by sucking out any surplus.

The scheme is part of price support measures amounting to ₹40,500 crore to grant cash-credit facilities to central food agencies, such as the Food Corporation of India and NAFED. During 2021-22, the Centre bought nearly 900,000 tonne of pulses for its reserve under PSS.

The scheme allows central agencies to withdraw the required funds against guarantees by the Union government for paying MSP rates to farmers, apart from other operational costs.

“The government has targeted to release 1.5 million tonne of channa at a discount, but how much the Centre will be able to offload depends on the how much and how many states would be willing to buy,” said Abhishek Agrawal, an analyst with Comtrade.