Due to difficulty in procurement at MSP, procurement of gram under PSF is possible
24-May-2025 01:14 PM
New Delhi. For the central pool (buffer stock), the Ministry of Agriculture has approved the procurement of a total of 28 lakh tonnes of gram under the Price Support Scheme (PSS) in major producing states. However, less than 2.50 lakh tonnes of gram has been procured so far under this scheme.
The arrival of new gram in mandis is declining, indicating that the peak supply period for this key Rabi pulse is nearly over.
The minimum support price (MSP) of gram was increased by Rs 210—from Rs 5,440 per quintal for the 2023-24 season to Rs 5,650 per quintal for the 2024-25 season. Although the wholesale market price of gram has dropped significantly from its recent peak, it is still hovering around or slightly above the MSP.
On the previous day, the price of gram was recorded at Rs 6,050–6,100 per quintal in Indore Mandi. As a result, government agencies like NAFED and NCCF are finding it difficult to procure gram in expected volumes.
Very little gram is currently available in the central buffer stock. Additionally, the pace of imports from countries such as Australia and Tanzania has slowed.
To maintain import continuity, the government has reduced customs duty on gram to just 10 percent—compared to 60 percent a year ago—and had made gram imports duty-free in May 2024.
A record procurement of 26.10 lakh tonnes of gram was achieved in the 2021-22 season, followed by 23.50 lakh tonnes in 2022-23.
However, with market prices rising, cooperative agencies could only buy 43,120 tonnes in 2023-24. The current 2024-25 season is also seeing limited procurement success.
Last year, due to insufficient government-held stock, it became difficult to control prices when the domestic market witnessed a sharp rise.
To avoid a repeat of that situation, the government may not want to take risks. If procurement under the PSS continues to be difficult, the government could consider purchasing gram at prevailing market rates under the Price Stabilization Fund (PSF) scheme.
Since the open market price is higher than the MSP, implementing the PSF scheme may further support and strengthen gram prices.