Bengaluru: Amid fall in arecanut prices in the domestic market, the Centre is ready to procure the commodity from Karnataka but has found the rate Rs 300-400/kg proposed by the state government “exceedingly” high.

The Union Agriculture Ministry has sent its senior official to Bengaluru to discuss Karnataka government’s proposal for procurement of 40,000 tonnes of arecanut under the Market Intervention Scheme (MIS).

In June, senior BJP leaders from Karnataka including Union Minister Ananth Kumar had demanded that the Centre should take steps to check sliding prices. They had sought ban on import of arecanut, among others.

“We are examining Karnataka’s proposal. It has been found that procurement rates, market prices and cost of production figures given by the state are on the higher side,” a senior Agriculture Ministry official told PTI.

On the state government’s proposal to buy white supari at Rs 300 per kg and red supari for Rs 400 per kg, the Agriculture Ministry is of the view that this price is “exceedingly” high compared to Rs 172 per kg recommended by the Kerala-based Directorate of Arecanut and Spices Development.

Moreover, the Directorate has informed that the prevailing market price of arecanut in Karnataka is above the cost of production. The market prices have fallen by 18 per cent for white variety and 16 per cent for red variety of arecanut over the previous year.

The Union Agriculture Ministry also felt that the state government’s estimate of arecanut production in Karnataka is lower at 4.07 lakh tonnes in 2015-16 crop year (July-June), as against 4.5 lakh tonnes projected by the Directorate.

The ministry also found that the cost of production of arecanut in the state was quoted on a higher side at Rs 300-400 per kg, as against Rs 172 per kg by the Directorate.

On quantity of procurement, the ministry felt that it should be restricted up to 10 per cent of the total production of different varieties. Therefore, it should be 24,471 tonnes of white supari and 16,314 tonnes of red supari.

However, the state government has proposed procurement of 28,000 tonnes of white supari and 12,000 tonnes of red variety.