Mandi Prices of Pulses and Oilseeds Dip Below MSP: Government Steps Up Procurement

Consumer Staples

19 days agoPWG Publications

Introduction to the Crisis

The current agricultural market in India is facing a significant challenge as the mandi prices of pulses and oilseeds continue to fall below the Minimum Support Price (MSP). This trend has raised concerns for farmers, who are struggling to receive fair prices for their produce. In response to this situation, the government has initiated measures to enhance procurement under the Price Support Scheme (PSS), aiming to provide remunerative prices to farmers.

Impact of Falling Prices

The prices of key crops such as soybeans, mustard, and pulses like chana and masur are ruling below their respective MSPs. For instance, soybean prices are hovering between Rs. 3900 and Rs. 4100 per quintal, significantly lower than the MSP of Rs. 4892 per quintal for the 2024-25 season[1]. Similarly, mustard prices are expected to remain below the MSP of Rs. 5950 per quintal as arrivals increase[2].

Key Factors Influencing Prices

Several factors contribute to the decline in mandi prices:

Global Market Conditions: A glut in global soybean supplies has led to a drop in domestic prices[1].
Crop Prospects: Robust crop prospects have increased supply, which tends to depress market prices[2].
Import Surge: Increased imports of pulses and edible oils have further impacted domestic prices[2].

Government Initiatives

To address these issues and support farmers, the government is taking several steps:

Increased Procurement

Record Procurement Plans: The government aims to purchase over 6 million tonnes of oilseeds and 5 million tonnes of pulses during the 2024-25 season, which would be a record[2].
Procurement Sanctions: The agriculture ministry has sanctioned the purchase of 4.5 million tonnes of pulses in key states like Karnataka, Maharashtra, and Madhya Pradesh[2].

Price Support Scheme (PSS)

PSS Implementation: The PSS is a component of the Pradhan Mantri Annadata Aay Sanrakshan Abhiyan (PM-AASHA), which ensures that farmers receive remunerative prices when market prices fall below the MSP[4].
Procurement Operations: Procurement operations under PSS are set to begin in key states, with significant quantities of chana, masur, and mustard sanctioned for purchase[1][2].

Buffer Stock Creation

Import Reduction Strategy: To reduce dependence on imports, the government has lifted procurement ceilings for certain pulses, enabling the purchase of up to 100% of state production[2].
Storage and Distribution: Creating a buffer stock helps stabilize prices and ensures a smooth supply of essential commodities throughout the year.

Future Outlook

The government's proactive measures are expected to stabilize market prices and provide relief to farmers. However, challenges such as global market volatility and import dynamics will continue to impact domestic prices.

Market Expectations

Price Stabilization: Increased government procurement is likely to reduce price volatility and offer better remuneration to farmers.
Sustainability of Initiatives: Long-term sustainability of these initiatives will depend on their effective implementation and the ability to maintain market stability.

Recommendations from Stakeholders

Stakeholders like the Soybean Processor Association of India (SOPA) suggest that selling stocks held by agencies should be delayed to avoid depressing market prices further. For instance, SOPA advocates for selling soybean stocks after July 15, 2025, to prevent price drops during the upcoming kharif season[1].

Conclusion

The falling mandi prices of pulses and oilseeds underscore the need for robust support systems for farmers. The government's efforts to boost procurement and stabilize prices are crucial steps toward ensuring farmers receive fair prices for their produce. As the agricultural sector continues to face challenges, the effectiveness of these measures will be closely monitored to assess their impact on both farmers and the broader economy.

Related Trends and Developments

Agricultural Reforms: Recent agricultural reforms aim to enhance market accessibility and improve farmer income through direct market linkages.
Monsoon Impact: The success of monsoon rains plays a crucial role in determining crop yields and subsequent market dynamics.

Key Developments in Pulse and Oilseed Production

Production Trends: Pulses production has been impacted by factors like climate and market conditions, affecting overall supply levels.
Government Support: Initiatives like MSP and buffer stock creation are essential for maintaining price stability and farmer profitability.

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