India has raised the price at which it will buy new-season common rice varieties from local farmers by 3.7 percent and has offered to pay an extra 2,000 rupees a tonne to pulse growers over government-set support prices, the law minister said. For common grades of rice, the government has fixed the support price at 14,100 rupees a tonne and for superior varieties the guaranteed price stands at 14,500 rupees a tonne, up from 14,000 a tonne last year, Ravi Shankar Prasad said after a cabinet meeting.
For the three main varieties of lentils, popularly called pulses in India, the government has offered an additional 2,000 rupees a tonne over support prices that had been fixed at 44,250, 46,500 and 44,250 rupees a tonne. The government buys rice and wheat from local farmers at a fixed price to build stocks for its food welfare programmes and meet emergency needs.
Unlike rice and wheat, the government does not buy pulses from farmers. But if local prices fall below the government-fixed support price, state agencies will purchase pulses to protect growers from distressed sales. India is sitting on massive stockpiles of rice and wheat but New Delhi has to import between 3.5 million tonnes and 4.0 million tonnes of pulses from Austria, Canada and Myanmar to meet a shortfall. Expecting a sharp rise in local prices, the government last week said it could consider allowing pulse imports by state-backed trading companies to ensure availability in the domestic market. Forecasts of sub-par monsoon rains have stoked worries of a spike in retail food inflation that eased to 4.8 percent last month from 5.11 percent in April.