NAFED Current Affairs

CCEA approves measures to increase Pulses’ production

The Cabinet Committee on Economic Affairs (CCEA) has approved creation of buffer stock of pulses to deal with wide fluctuation in prices of pulses and check food inflation.

The buffer stock will be created by the procurement and would be valid for fiscal year 2015-16.

As per decision

  • The buffer stock will consist about 50000 tonnes of pulses from the kharif crop 2015-16 and one lakh tonnes from the rabi crop of 2015-16.
  • The Procurement will be done at market prices through above Minimum Support Price (MSP) out of the Price Stabilisation Fund.
  • If the prices fall below MSP, the procurement will be made at MSP under Price Support Scheme of Department of Agriculture (DoA).
  • Procuring agencies would be Food Corporation of India (FCI), National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) and Small Farmers’ Agribusiness Consortium (SFAC).

The CCEA also decided to import pulses through Union Ministry of Commerce depending on the requirement.

Comment

  • Though being the highest producer of pulses in the world, India faces shortage as its domestic demand outstrips domestic production.
  • It leads to fluctuation in prices and food inflation. As a short term measure the shortfall of pulses is usually met from imports.
  • However, there is need for a long-term solution to meet its demand and increase pulses production in the country.
  • Presently, Union government promotes cultivation of pulses mainly through National Food Security Mission (NFSM) which covers 622 districts in 27 states.
  • Around 50 per cent of allocation of NFSM is made for pulses. Under it, financial assistance is given for distribution of quality seeds of new varieties, integrated pest management, water saving devices, demonstration of improved technology and capacity building of farmers.

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Union Cabinet approves reimbursement to 4 government agencies for import of pulses

The Union Cabinet has approved reimbursement of 113 crore rupees for incurring losses on pulses imported by four government agencies between 2006- 2011 period.

These four government agencies are National Agricultural Cooperative Marketing Federation of India (NAFED), Metals and Minerals Trading Corporation of India (MMTC), State Trading Corporation of India (STC) and PEC.

This decision will enable these 4 PSUs to be financially sound in order to intensify trading activities to cool down prices of essential commodities.

This decision was taken at Union Cabinet meeting chaired by Prime Minister Narendra Modi proposal of Union Ministry of Food and Consumer Affairs.

Background

  • During the period from 2006-11, Union Government had introduced two schemes in order to bridge the demand-supply gap in pulses.
  • In first scheme, Government had asked these four PSUs to import and sell pulses in the open market with subject to reimbursement of 15 per cent losses.
  • The other scheme government was to distribute these imported pulses via ration shops i.e. Public distribution System (PDS) to poor people at a fixed subsidy of 10 rupees per kg.

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