Government Considers Policy to Increase MSP Acquisition of Chana
Government Evaluates Strategies to Enhance Chana MSP Procurement Amidst Slow Progress in 2024-25
The government is exploring potential measures to escalate the procurement of chana (chickpeas) as the current pace of acquisition remains sluggish for the 2024-25 season. Mandi prices have been hovering below the minimum support price (MSP) of Rs 5,650 per quintal, leading to a mere procurement of 0.2 million tonnes (MT) thus far. The influx of duty-free yellow pea imports, coupled with private sector purchasing and reduced chana production, have significantly influenced mandi prices and the establishment of buffer stocks.
During the 2023-24 period, procurement agencies managed to acquire only 43,120 tonnes of chana under the Price Support Scheme (PSS). In contrast, the MSP purchases for the 2021-22 and 2022-23 seasons were substantially higher at 2.61 MT and 2.35 MT, respectively. Sources indicate the sluggish procurement is largely due to mandi prices being just shy of the MSP, which discourages farmers from selling to government agencies. The procurement process under the PSS is ongoing.
Moreover, trade sources have noted that the arrival of pulse varieties in mandis has already peaked, yet private buyers have been active this season, with market prices staying around Rs 5,400 per quintal across various regions. An official mentioned, “We are still assessing the market prices before deciding to purchase at market rates to bolster our buffer stocks.”
The Maharashtra Dall Millers Association has recently voiced concerns to the government, requesting a halt to the duty-free imports of yellow peas, which serve as a substitute for chana, and urged for a return of a 60% import tariff on Bengal gram. The surge in imports is negatively impacting mandi prices. Since December 2023, over 3 MT of yellow peas have entered the market, while the government aims to increase domestic chana supplies due to a decline in production from 12.26 MT in the 2022-23 crop year to 11 MT in 2023-24.
Furthermore, the duty-free import of yellow peas is permitted until May 31, 2025. Trade sources have pointed out that last year’s chana production was significantly lower than government forecasts, which led to a more relaxed import policy. Additionally, Australia and Tanzania imported 1.6 MT of Bengal gram last fiscal at a current import duty of only 10%.
The agriculture ministry projects chana output for the 2024-25 crop year to be slightly increased at 11.53 MT. However, dynamic private sector purchases have led to decreased government procurement levels. As of April 1, the government has ceased milling chana under the Bharat Dal initiative due to dwindling stocks caused by the slow procurement rate. During the 2023-24 fiscal year, only 43,120 tonnes of chana could be purchased under the PSS, contrasting sharply with the higher figures for the 2021-22 and 2022-23 seasons.
