To woo the pulses farmers to sell their produce to the procurement agencies, the Indian government has announced a Rs 5-a kg incentive to the growers, on top of the higher support price that it had announced last week.
The incentive of Rs 500 per quintal would be given to the farmers growing tur, urad and moong dals, sold during the two-month harvest period. The new sop would cost the Centre an
additional outgo of up to Rs 2,000 crore this year.
"This is likely to result in a subsidy payment of Rs 1,000 crore to Rs 2,000 crore," an official statement said.
Last week, the Cabinet Committee on Economic Affairs had announced a sharp increase of up to Rs 700 a quintal in the minimum support price of pulses.
The government soon followed this up with an additional incentive of Rs 5 a kg to the farmers to motivate them to increase acreage under pulses, particularly widely consumed arhar, moong and urad dals.
Prices of pulses are skyrocketing in the retail market.
Moong dal is selling at over Rs 100 a kg, while arhar and urad dals are also not far behind. The domestic production of pulses stood at 14.77 million tonne in the 2009-10 crop year
as against the annual demand of 18-19 million tonne, resulting in 3.5 million tonne imports last fiscal.
The maximum increase in the MSP was given for tur, which is now 30 per cent at Rs 3,000 a quintal from Rs 2,300 last year. The MSP of moong dal has been raised from Rs 2,760 to Rs
3,170 per quintal, while that of urad to Rs 2,900 per quintal from Rs 2,520.
The Centre is also spending Rs 837 crore under various schemes for pulses development this year, which is an eight-fold increase from Rs 105.59 crore in 2007-08 fiscal, to encourage farmers for growing more pulses.
"The rise in public investment, availability of inputs, extension support, increase in MSP and the special incentive
of Rs 5 per kg are expected to spur farmers to grow pulses.
This, in turn, will reduce the country's dependence on imports and lead to moderation in prices," the statement said.