Centre asks states to impose a limit on stocking of pulses

#GS3 #STOCKS #HOARDING #PULSES.

Context: 

In an effort to arrest the spiralling prices of pulses, the Union government recently directed the States to impose a stock limit on all pulses except moong till 31st October 2021.

What happened before:

Previously, the Department of Consumer Affairs, which monitors the costs of essential commodities on a daily basis, took the initiative of stock declaration and monitoring of stock of pulses.

Important points:

  • The Department of Consumer Affairs issued the Removal of Licensing Requirements, Stock Limits and Movement Restrictions on Specified Foodstuffs (Amendment) Order, 2021 prescribing the boundaries which are imposed with immediate effect.
  • According to the order:
  • The stock limit of 200 tonnes has been levied on wholesalers and traders provided they do not hold over 100 tonnes of 1 variety of pulses.  
  • For retailers, the stock limit are 5 tonnes.  
  • In the case of millers, the stock limit are going to be the last three months of production or 25% of annual installed capacity whichever is higher.
  • For importers, the stock limit are going to be an equivalent as that of wholesalers for stocks held or imported before May 15, 2021, and  
  • For pulses imported after May 15, the stock limit applicable on wholesalers will apply after 45 days from the date of customs clearance.
  • If the stocks of entities exceed the prescribed limits, they need to be declared on the web portal of the Department of Consumer Affairs and need to be brought within the prescribed limit within 30 days of the notification of the order.
  • Imposing stock limits on all pulses, except moong.
  • For the foremost a part of the year, pulses are traded either above or very near its MSP, primarily because of its supply constraint.

Key initiative so far by the govt to regulate the price of pulses:

  • It will ensure its availability to consumers at affordable prices and bridge the demand and supply gap.
  • The power to issue orders for collecting information or statistics with reference to essential commodities has been delegated by the Central Government to the state government.
  • Declared stocks need to be verified by States/UTs.
  • It was also requested that States/UTs monitor the prices of pulses on a weekly basis.
  • This is the first time when such a mechanism has been adopted to urge the real-time stock of pulses everywhere the country to keep a check on the undesirable practice of hoarding leading in turn to artificial scarcity and price escalation.
  • It directs all the Stockholders to register themselves on an online portal and declare their stock of pulses.
  • Increased procurement thorough buffer and enhancement of buffer targets.
  • To ensure a simpler intervention towards price stabilisation, the targeted size of pulses buffer to be maintained within the current year (FY 2021-22) under the price Stabilisation Fund (PSF) has been raised to 23 LMT.
  • Release of pulses under various welfare schemes and PMGKAY.
  • Supply of pulses for welfare schemes of the States
  • As per the decision taken by the govt in 2017, Ministries/departments were to utilise pulses from the central buffer for their schemes with nutrition component or providing food/ catering/hospitality services, like PDS distribution, in Mid-day Meal Scheme and ICDS Scheme.
  • State Governments worked closely with NAFED for finalising storage locations and delivery points, to make sure that the pulses reached the poor households and contributed to their nutritional security.
  • A mechanism for retail intervention was introduced in 2020-21 to reinforce the direct and immediate impact of releases from pulses buffer on cooling down retail prices.
  • Under this mechanism, Moong, Urad and Tur were offered to the States/UTs at a discounted rate for supply through stores like FPS, Dairy & Horticulture outlets, Consumer Cooperative Society outlets etc.
  • Costs of supply like milling/processing, transportation, packaging, FPS dealers’ margin etc. were borne by the Department.

BIASA BASICS 

Price Stabilisation Fund (PSF):

Objective:

  • To mitigate volatility within the prices of agricultural produce.
  • Salient Features:
  • The scheme provides for maintaining a strategic buffer of commodities for subsequent calibrated release to moderate price volatility and discourage hoarding and unscrupulous speculation.
  • For building such stock, the scheme promotes direct purchase from farmers/farmers associations at farm gate/Mandi.
  • The PSF is employed for granting interest-free advance of working capital to Central Agencies, State/UT Governments/Agencies to undertake market intervention operations.
  • Apart from domestic procurement from farmers/wholesale mandis, import can also be undertaken with support from the Fund.

Management:

  • The Fund are going to be managed by the Prize Stabilization Fund Management Committee which can approve all proposals from government and central agencies.
  • It will be maintained during a Central Corpus Fund account to be opened by the small Farmers Agri-Business Consortium (SFAC), which can act as Fund Manager.

Funding:

  • It is a Central Sector Scheme
  • The States will need to found out a fund to which the Centre and State will contribute equally (50:50).
  • The Ratio are going to be 75:25 in North East states.

National Agricultural Cooperative Marketing Federation of India Ltd (NAFED):

  • It is an apex organization of promoting cooperatives for agricultural produce in India, under the Ministry of Agriculture, Government of India.
  • It is registered under the Multi-State Co-operative Societies Act.
  • With its headquarters in New Delhi , NAFED has four regional offices at Delhi, Mumbai, Chennai and Kolkata.
  • NAFED is that the nodal agency to implement price stabilization measures under "Operation Greens" which aims to double the farmers' income by 2022.
  • In 2008, it established the National Spot Exchange, a Commodities exchange as a joint venture of financial Technologies (India) Ltd. (FTIL).

 

SOURCE: THE HINDU 

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