High prices may hit Nafed buying

The National Agricultural Cooperative Marketing Federation (Nafed) may not be able to procure any commodity except soybean in the 2006 kharif marketing season.

"It would not be possible for us to procure kharif pulses, like urad, moong or tur, as the prices of these are expected to rule well above the Minimum Support Price (MSP) for the entire season," said Nafed Managing Director Alok Ranjan after an inter-state conference on price support scheme for kharif crops of oilseeds and pulses for the 2006-07 marketing season.

The MSP of various pulses declared by the government for the 2006-07 kharif season is substantially lower than the prevailing market price. The MSP for urad, moong and tur are Rs 1,520, Rs 1,520 and Rs 1,410 a quintal respectively.

However, the spot market prices of these commodities are ruling much higher at Rs 3,800-4,000 a quintal for urad, Rs 3,500 a quintal for moong and Rs 2,000 a quintal for tur.

But, the federation expects to procure about 1 lakh tonne of soybean from Madhya Pradesh. Maharashtra has also requested Nafed to purchase about 1 to 2 lakh tonne of soybean.

"We would also be keeping a watch on price of copra in Kerala and Tamil Nadu and groundnut in Andhra Pradesh. But, I don't see any significant procurement in these crops," said Ranjan.

In the 2005 kharif season too, Nafed could not procure any pulses because the market price ruled above the MSP. However, in the 2003 season, Nafed had procured 1.52 lakh tonne urad.

Punjab and Gujarat have requested Nafed to procure cotton. However, it may not be possible for it to procure cotton, as there is a no clear budgetary provision for cotton procurement by Nafed.

"We cannot procure cotton in the lack of a clear signal from the government. There is confusion as to whether the budgetary provisions are to be made by the ministry of agriculture or the ministry of textiles. This needs to be resolved between the two ministries," said Ranjan.

In 2004, Nafed was designated as the agency for procurement of cotton in addition to the Cotton Corporation of India.