MSP intervention: A different surplus -Harish Damodaran

-The Indian Express

The unprecedented procurement of pulses and oilseeds in the last couple of years has created problems — and opportunities.

If there’s one area in agriculture where the Narendra Modi government has probably broken fresh ground, it is in the procurement of pulses and oilseeds.
 
During the 2016-17 and 2017-18 agricultural years (July-June), the Central agencies — National Agricultural Cooperative Marketing Federation of India (Nafed), Small Farmers’ Agribusiness Consortium (SFAC) and Food Corporation of India (FCI) — together procured 18.78 lakh tonnes (lt) and 44.96 lt of pulses, plus 2.16 lt and 19.99 lt of oilseeds, respectively. a

This extent of procurement, under the Centre’s PSS (price support scheme) and PSF (price stabilisation fund) programmes, has never taken place before. There were years previously when significant quantities of particular pulses and oilseeds got bought — notably the 3.64 lt of chana (chickpea) and 3.61 lt of groundnut pods by Nafed and SFAC in 2013-14, when the Congress-led United Progressive Alliance was in power.

But in the last two years, especially 2017-18, governmental purchases at minimum support prices (MSP) have been across the board for major pulses — arhar/tur (pigeon-pea), moong (green gram), urad (black gram), chana and masoor (lentil) — and oilseeds, including groundnut, rapeseed-mustard and soyabean (see table).
 

 
The bulk of this procurement has, interestingly, been carried out by an organisation that was in the red until recently, with accumulated losses of Rs 1,090.93 crore as of March 31, 2017 more than eroding its share capital and reserves of Rs 416.83 crore. Nafed, moreover, had unserviceable debts of over Rs 3,000 crore owed to commercial banks.

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The Indian Express, 10 January, 2019, https://indianexpress.com/article/india/msp-intervention-a-different-surplus-5530965/

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