Building a viable value chain for pulses

The rapid strides taken by India in pulses production is the less talked about success story of the decade. Overall pulses production reached a high of 231.5 lakh tonne (lt) in 2019-20, against 146.4 lt in 2009-10. With imports coming down to 11 per cent of availability during 2019-20, we are now largely self-sufficient.

This significant increase in production is a commendable feat by the farmers. Regular procurement of pulses at Minimum Support Price (MSP) and focus on increased production and productivity have played a critical role in providing remunerative prices and an assured market to the cultivators.

The key challenge for this source of inexpensive proteins is its availability at affordable rates to consumers across all income groups given predominantly vegetarian diets.

Pulses are relatively easier to grow from the perspective of small and marginal farmers, with smaller duration, lesser requirement of water and land use. However, growers of pulses need to be sufficiently remunerated more so given the positive externalities (nitrogen fixation, water efficiency) bestowed by pulses to the environment. This would also contribute towards re-alignment of cropping pattern away from fertiliser and water-intense crops in a sustainable manner.

It is therefore necessary to focus on stability of policy in terms higher procurement at MSP, pre-fixation of MSP levels, developing an overall perspective for the next few years with well analysed production estimates and import levels.

In the post Covid scenario, inflation targeting will become crucial. However, pulse-specific production levels and retail prices have been fluctuating depending on year-wise cultivation and market signals including prevalent prices for the current and previous year.

Price stability

To ensure that pulse price does not emerge as a pressure point as far as inflation is concerned given the tight demand-supply balance, the need of the hour is ensuring stability in prices of pulses enabled by a steady availability. This entails appropriate use of required policy instruments, along with, maximisation of interests of both farmers and consumers. For this a strong value chain for pulses is crucial as this could lead to consumption of more healthy, pulses-based diets.

Establishment of value chain will require integration of the following components: One, small scale/household level processing units need to be set up in pulses growing areas, especially at the cultivator’s location. It is often observed that price difference between raw/unprocessed pulses and processed dal/pulse products (papad, roasted chana, besan etc) is significant.

If this margin could partially/entirely accrue to the growers, it would enhance their realisations. Also, intermediary costs (including margins) and transportation costs would be saved.

Two, convergence with various components of National Rural Livelihoods Mission (NRLM) must be ensured by States/UTs in improving nutrition status. Most importantly the Community Investment Fund can act as Seed Capital to Self Help Group (SHG) Federations at Cluster level and Vulnerability Reduction Fund (VRF) to SHG Federations at Village level for procuring/setting up of processing facilities. Small-scale mills can provide better conversion ratio of raw to milled pulses with better nutrition content. The successful model of SHGs in this way could feed into agriculture initiatives in a sound manner.

Three, existing schemes must be leveraged for creating infrastructure. Components of CEFPPC scheme (Creation/Expansion of Food Processing/Preservation capacities) and Agro Processing Clusters can be dovetailed under the Pradhan Mantri Kisan SAMPADA Yojana for funding purposes.

Four, the funding facility under the Agriculture Infrastructure Fund comprising of ₹1 lakh crore must be used for providing debt financing facility over four financial years for investment in viable projects for post-harvest management infrastructure and community farming assets through interest subvention and financial support.

Five, participation and strengthening of FPOs must be encouraged to improve bargaining power of the farmer and ensure that a greater proportion of expenditure incurred by the consumer is received by the grower by reducing intermediary cost/margins. Pooling of land/resources in country like ours with predominantly small and marginal farmers would prevent duplications of efforts. The PM FPO Kisan Yojana to promote 10,000 new FPOs by 2023-24 with a special emphasis on involvement of small and marginal farmers is an encouraging step in this direction.

Six, tax sops must be given to agri-business start-ups. A component, ‘Innovation and Agri-entrepreneurship Development programme’ has been launched under Rashtriya Krishi Vikas Yojana (RKVY) to promote innovation and agri-preneurship by providing financial support and nurturing the incubation ecosystem. Innovations in pulses for setting up such units should be encouraged.

Implementing the above suggestions can be a game changer for both consumers and farmers, maximising benefits for all.

Dutta, Asha and Bansal are Senior Economic Adviser, Assistant Director and Junior Statistical Officer in the Department of Consumer Affairs, Ministry of Consumer Affairs, Food and Public Distribution, respectively. Views expressed are personal