The Cabinet Committee on Economic Affairs (CCEA) on Wednesday approved the disposal of 1.5 million tonne (mt) of chana (gram) from the surplus buffer stock held with the National Agricultural Cooperative Marketing Federation of India (Nafed), at discount of Rs 8 per kg over the issue price, to states for supplying through various social sector schemes.

According to an official statement, the states and Union territories have given a time-frame of one year or till disposal of 1.5 mt of chana for availing benefits of the scheme. The government’s expenses are expected to be around Rs 1,200 crore for implementation of this scheme. “This will enable the states/UTs to use chana in various welfare schemes like public distribution system, mid-day meal schemes, etc besides making available space of warehouses, which may be required in the coming rabi season for accommodating fresh stock,” it stated.

The pulses were procured under the price support scheme (PSS) being implemented by the agriculture ministry and the price stabilisation fund (PSF) operated under the department of consumer affairs. The CCEA also approved an increase in the ceiling on quantity of procurement under PSS, from the existing 25% to 40% of the marketable surplus in case of pulses varieties — tur, urad and masur.

FE had reported on June 15 that keeping in consideration the quality aspect of the year-old crop and reducing the recurring expenses towards carry-forward stocks, the government was considering a proposal to offer chana to states at discounted prices for distribution under the various welfare schemes. At present, against the government’s buffer stock norm of 2.3 mt, Nafed has 3.57 mt of pulses. Of this, the chana stock is more than 3 mt. A portion of the stock is close to two years old.

However, in the case of other varieties of pulses, because of lower procurement, the government’s stocks are smaller — moong (0.31 mt), urad (0.01 mt), tur (0.12 mt) and masoor (0.06 mt) — at present. Due to a record chana production of 13.75 mt in the 2021-22 crop year (July-June), Nafed procured more than 2.5 mt of pulses in the 2022-23 (April-June) season under the PSS, aimed at providing minimum support price (MSP) to farmers.

Chana has a share of close to 50% in the country’s production of 27.69 mt in the 2021-22 crop year. Meanwhile, Nafed has decided to sell around 0.5 mt of chana at the prevailing market prices to bulk buyers in Rajasthan, Madhya Pradesh, Maharashtra, Gujarat, Andhra Pradesh, Telangana and Karnataka from the 2020-21 and 2021-22 seasons.

Currently, mandi prices of chana are ruling around 4,200-4,600 a quintal against an MSP of 5,230 a quintal for the 2022-23 season. “These moves by the government to sell surplus pulses stocks is expected to put pressure on chana prices, which are currently trading below the MSP at various mandis,” Harsh Rai, head, Mayur Global Corporation, an agri-business firm, told FE.

Stating that Nafed often offloads in the market at discounted prices and this leads to sharp decline in market prices of the commodity, the Commission for Agricultural Costs and Prices (CACP), in its report of price policy for rabi crops for the marketing season 2022-23, has stated it was highly desirable to fix a reserve price that is linked to MSP, for disposal of stocks similar to wheat and rice, under the Open Market Sale Scheme being implemented by the Food Corporation of India.