Subsidising Farmers in Rich Countries.

The Ministry of Food and Consumer Affairs has extended the subsidy for pulses by one more year until 31 March 2012. A subsidy of Rs 10 a kg is given to the States for distribution of pulses under PDS. India also imports pulses around a quarter of its total pulse supplies from countries including from Canada, Australia and so on.

India also has a minimum support price for pulses which has been very appropriately raised by the last Chairman of the CACP, Dr. Mahendra Dev before he went back to his academic career as Director of the prestigious Indira Gandhi Institute of Development Research at Mumbai. Dev like Panning Commission member and former Chairman CACP Abhijt Sen and me has been a votary of the integration of domestic price policies with trade policies, but such advice has few takers in Government.

If you are exporting pulses to India you will keep into account the domestic prices and they may be high at some periods but are high in the harvest and marketing season because you have a support policy for them. The idea of support prices is to support the Indian farmer to grow pulses and not get discouraged by low prices, when he sells. You could support the farmer and subsidize the consumer when India was a closed economy .

Source : indianexpress.com