With pulse prices continuing to rule up to Rs 190 per kg, the government on Wednesday decided to create a buffer stock of pulses by procuring 1.5 lakh tonnes of lentils that will be used to check spurts in retail rates.

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The Cabinet Committee on Economic Affairs (CCEA) also decided to import pulses if required.

The government had in October announced that it will create a buffer stock of pulses for making market intervention when prices firm up in retail markets.

"The CCEA has given its approval for creation of buffer stock of pulses. The buffer stock will be created in current year itself. It has approved procurement of about 50,000 tonne pulses from the kharif crop 2015-16 and one lakh tonne out of arrivals of rabi crop of 2015-16," an official statement said.

Pulses would be procured at "market prices" through Food Corporation of India (FCI), cooperative Nafed and Small Farmers' Agribusiness Consortium (SFAC) and any other agency as may be decided. SFAC will undertake procurement through Farmer Producer Organisations.

The procurement in kharif and rabi 2015-16 will be done at market price above Minimum Support Price (MSP) out of the Price Stabilisation Fund.

The CCEA decided to import pulses, if necessity arises, through a public sector enterprise of Commerce Ministry.

In case the prices fall below MSP, pulses for buffer stock would be procured at MSP under Price Support Scheme of Union Agriculture Ministry.

"The decision to create a buffer stock of pulses to deal with wide fluctuation in prices is an important step for checking food inflation.

"This will also encourage farmers to take up pulses production on a larger scale and will enable India to help achieve self-sufficiency in pulses in a few years," the statement said.

The need for creating the buffer stock arose as retail prices have gone through the roof due to fall in domestic output by two million tonnes to 17.2 million tonnes in 2014-15 crop year (July-June).

According to the Consumer Affairs Ministry data, the maximum price of tur is currently ruling at Rs 180 per kg while the average price is Rs 160 per kg. The maximum price of urad dal is Rs 190 per kg while the average rate is Rs 120/kg.

India is the world's largest producer of pulses, but its domestic demand outstrips production. The shortfall is met from imports.