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As the prices of key agri-commodities such as groundnut, cotton and pulses have been ruling below the minimum support price (MSP), the government of Gujarat has decided to procure these commodities to support the farmers after the Diwali festival.
Initially, the state government will start procurement of groundnut from the farmers at the MSP rate in the state and will allot Rs 100 crore for it from emergency fund.
Earlier, in 2013, the state government had procured about 100,000 tonnes groundnut from the farmers as prices decreased below MSP due to bumper production. The state government will procure same amount of groundnut in this year alos.
"We have given necessary direction to civil supplies corporation, National Agricultural Cooperative Marketing Federation (NAFED), Gujarat State Cooperative Marketing Federation Ltd (Gujcomasol), Gujarat State Co-Operative Cotton Federation Limited (Gujcot) and Cotton Corporation of India (CCI) to buy groundnut, cotton and pulses," said Chiman Shapariya, agriculture minister of Gujarat.
After 2013, Gujarat government has taken this decision to procure groundnut from farmers to protect them from financial loss as the prices of the commodity has sharply declined during this month because of higher supply.
Shapariya said, "As the crop size of groundnut is almost double in this kharif season, prices of groundnut has decreased to below MSP. To protect the farmers from loss, Gujarat government has decided to procure groundnut from farmers at the MSP rate."
Government of India fixed Rs 4,120 per quintal MSP of groundnut crop for the year 2016-17 while currently it is ruling at Rs 3,500-3,600 per quintal. Similarly, MSP of kapas or raw cotton has been fixed at Rs 4,160 per quintal. At present kapas is traded at Rs 3,500-4,000 per quintal.
Daily arrival of groundnut crop has reached to over 100,000 bags and according to market sources, it will go up to 160,000-175,000 bags by end of November this year. According to the Solvent Extractors' Association of India (SEA) estimate, groundnut production in Gujarat will be around three million tonnes in 2016-17 as against 1.42 million tonnes in 2015-16.
