Hike MSP for chickpeas during rabi season: Panel


A panel headed by Chief Economic Advisor (CEA) Arvind Subramanian has recommended an immediate hike in the minimum support price (MSP) of pulses — chickpeas (chana) to Rs. 40 per kg for rabi 2016 and Rs.60 per kg for both split black gram (urad) and split red gram (tur) for kharif 2017 — so as to reduce volatility in consumer prices of pulses and at the same time boost farmers’ income.


The government should procure pulses on a “war footing” for building up the buffer stock of 2 million tonnes announced earlier, Dr. Subramanian told reporters after submitting the panel’s report to Union Finance Minister Arun Jaitley on Friday.

The CEA-led panel, which was set up in the wake of a recent spurt in retail prices of pulses, has cautioned against the use of trade policy to control domestic prices as this induces policy volatility and called for the elimination of export bans on pulses and the placement of stock limits.

Hurting consumers

Such short-term actions that apparently benefit consumers end up hurting them because production and availability of pulses decline over time, the CEA-led panel explained.

In turn, better incentives for farmers in the form of higher minimum support prices (to reflect the true social value of growing pulses compared to other crops) combined with effective procurement of the produce offers the best way of increasing domestic availability and preventing price increases, Dr. Subramanian told reporters.

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