In sweeping reforms aimed at boosting pulse production and checking prices, a CEA-led panel today called for raising the support price by up to Rs 1,000 per quintal and lifting of export ban and stock limit, besides promoting GM crops.
The report also suggested an extra allocation of Rs 10,000 crore to procurement agencies to buy dal on a "war footing" and production subsidies for farmers, besides reviewing of ban on future trading of pulses.
"Because pulses are grown in rain-fed areas, we need to give proper incentives to cover risk... Since the option of import is limited, the bottomline is we need to boost domestic production and productivity," CEA Arvind Subramanian told reporters after submitting the report to the finance minister.
Among steps required to be taken immediately, he said the procurement of kharif pulses should be geared up in a war footing mode to support farmers as prices of moong have dropped below the minimum support price (MSP) and even tur prices are heading lower.
To encourage farmers to grow pulses in coming seasons, he suggested a hike in MSP of gram by Rs 500 per quintal to Rs 4,000 for the 2016 rabi season to start from the next month.
He also recommended a sharp hike in MSP of tur and urad to Rs 6,000 for the kharif 2017. At present, the MSP of tur and urad is Rs 5,050 and Rs 5,000 per quintal, respectively.
"MSP for other pulses should be increased by the same per cent as calculated in this report for tur, urad and gram," he said further and suggested that the farm price advisory body CACP should review its methodology to fix MSP for various crops.
He also said MSP of tur should be raised to Rs 7,000 per quintal in 2018 when short duration kharif variety is ready for commercialisation.
Asked if hike in pulse MSP will impact inflation, he said, "I don't think increase in MSP will have any impact on inflation. The MSP increase will boost supply in the immediate term and bring down prices."
To encourage pulses in irrigated areas and rice fallows, the CEA suggested that the government should give production subsidies of about Rs 10-15 per kg to farmers via DBT.
Stating that MSP alone will not be enough to induce farmers to switch to pulses, Subramanian said, "This kharif season, the government should launch a war-effort to procure moong, tur and urad at their respective MSPs. It is meaningless if MSP is not backed up by procurement."
He also asked the government not to take "blunt steps" to check prices and called for immediate lifting of ban on exports and stock limits on traders.
Since pulse yields in India are below the world average, the CEA favoured development of GM technology to boost production and productivity, to boot. "We need to clearly signal that we are open to GM technology in pulses," he said.