The Indian central government's effort to procure tur dal (pigeon pea) at open market rates to replenish national stocks has met with a tepid response from farmers. Despite this, the government's presence in the market has contributed to an increase in tur prices. The procurement, led by the National Agricultural Co-operative Marketing Federation of India (Nafed), has been operational in Maharashtra and Karnataka. However, as of last week, Nafed has managed to procure only about 2,000 metric tonnes of raw tur. Farmers, especially smaller ones, prefer selling to private traders, and many larger farmers are holding their crops in anticipation of further price increases. This is due to the expectation of a deficit in the new tur crop and the current firmness in prices.
Currently, raw tur prices in wholesale mandis are approximately ₹100/kg, which is 40% higher than the minimum support price (MSP) of ₹70/kg. After processing at dal mills, tur dal is being sold for around Rs 140-145/kg at the mill gate and over ₹180/kg in retail markets. The government's use of a dynamic pricing formula, based on the average price of the previous three days, along with strict quality standards and complex formalities for selling to government agencies, has deterred farmers from participating in the government procurement scheme. As a result, the government's involvement in the market has inadvertently driven a 15% price increase in tur/arhar over the last two months, as confirmed by traders and processors.