The Govt role is to support the MSP only in the event of the market falling below MSP Level.
Nafed’s (National Agricultural Marketing Federation), additional managing director Mr. S.K. Singh, narrated an example of chickpea (chana), where” the market prices of chickpea keep improving to a level that by the time the crop is harvested and brought to the market, could reach the Minimum Support Price (MSP) level. ”
The main strategies being used by the central government for the MSP level is tweaking import and export policies to maintain enough stocks of the grains or other commodities in the country.
This strategy favors both farmers and consumers in way that it does not harm farm-end prices and at the same time does not pinch consumers.
Despite the inflation, tur grain imports have been permitted till end of December, 2020, when domestic crops came in the market. In case of masur, where prices went up due to huge demand, the import duty is lowered at 10% till end of December, 2020, after which the local crop is harvested. Traders are anticipating masur dall import duty to go up in 2021.
Mr. Sing who was speaking at an industry webinar last week, said that “It is in the interest of the market and the government to create an environment where farmers will get benefit from right price for their produce.
In case of pulses like tur, chana and masur, market prices are moving towards Rs 58/kg to Rs 60/kg in near future. We are trying to work the logic, scientific and balanced environment where the market itself will give MSP to the farmers.”
The next strategy of the is to use the buffer stock to monitor and control market prices. In case of chana, distribution of 1 kg of whole chana to 1.9 crore families for past nine months under the Prime Minister Garib Kalyan Yojana has helped reduce buffer stock, inducing demand for chana in the states where traditionally do not use for regular meal, supporting the prices. Prices for Tur dall are already ruling above MSP.
“That is the ideal condition for every crop, every season that the market pays the MSP to the farmers. Our role is to support the MSP only in the event of the market falling below MSP,” Mr. Singh answered to the question if the government is trying to maintain market prices at the MSP level around the harvest time?