New Delhi: In a bid to boost local output and prevent distressed sales, the Union cabinet on Wednesday doubled state purchases of oilseeds and pulses from farmers.
The amount that state agencies guarantee to buy at pre-set prices will double to 190 billion rupees ($2.9 billion) for a five-year period ending in 2021/22, government spokesman Frank Noronha said in a tweet.
India is the world's biggest edible oil buyer and frequently imports pulses, or lentils, because many farmers tend to swing from one commodity to another depending on government incentives, leading to oversupplies one season and shortages in the next.
The government has been seeking ways to encourage farmers to invest in those commodities.
"This will help in protecting the farmers producing these commodities from making distressed sales during peak arrival periods and to provide remunerative prices with a view to encourage higher investment and production ...," Noronha said.
Prime Minister Narendra Modi has been trying to cut edible oil import bill of more than $10 billion a year, but consumption has far outpaced demand in the country known for its love for deep-fried food.
The government imports vegetable oils mainly from Indonesia, Malaysia, Brazil and Argentina. Pulses are bought from Australia, Russia, Tanzania, Canada and the United States.
($1 = 65.1550 Indian rupees)