Government interventions needed to arrest pulses price fall: RBI
MUMBAI: With pulses prices under pressure due to supply glut, the Reserve Bank today made a case for government interventions to arrest the price fall.
Pulses prices, especially tur dal, have fallen sharply in wholesale mandis below the minimum support price (MSP) of Rs 5,050 per quintal due to a record crop this year.
In its second bi-monthly Monetary Policy Statement of 2017-18, the RBI said, “…the prices of pulses are clearly reeling under the impact of a supply glut caused by record output and imports. Policy interventions, including access to open trade, may be envisaged to arrest the slump in prices.”
There has been a large-scale augmentation of pulses supply on account of expansion in acreage, procurement, buffer stocking and imports, which has caused a sharp decline in prices starting in August 2016, it said.
The government has procured about 2 million tonnes of pulses for buffer stock from both domestic and global markets. Of which, more than 1.6 million tonnes of pulses has been brought directly from local farmers.
Normally, wheat and rice is procured at the MSP by the government. But, it decided to buy pulses for the first time to ensure assured returns to farmers on their pulses crop, which is grown in rainfed areas.
As per the Agricutlure Ministry, 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, on account of good monsoon, higher MSP and procurement arrangement.
Source: ECONOMIC TIMES