Don’t lose the pulse

As reported by Businessline last week, kharif pulses prices are rising after a gap of two years. Drought conditions in Maharashtra, Karnataka, Andhra Pradesh and Gujarat have impacted the standing crop of tur, urad and moong. As a result, tur prices have crept up from ₹3,500-3,600 a quintal in mid-October to about ₹4,500 now. Kharif pulses output has been estimated at 9.22 million tonnes this year, against 9.34 million tonnes last year. Chana, a rabi crop, accounts for about half of India's current pulses output of about 22-23 million tonnes. Generous increases in procurement prices led to a spike in pulses acreage and output in 2016-17 and 2017-18 (23 million tonnes) over earlier years (just 16.35 million tonnes in 2015-16). (For instance, tur MSP has been raised by about 30 per cent from 2014-15 to 2017-18, to ₹5,675 per quintal now. Moong MSP was raised 25 per cent to ₹6,975 over the last year, while chana MSP too was up 10 per cent over this period.) However, the resulting rise in output led to prices falling way below these MSP levels, with farmers taking to the streets.

The challenge is to sustain producer interest in pulses cultivation in a protein-deficient country. A shift from cereals to pulses is also critical to correct nutrition imbalance, and water and fertiliser use over time. However, recent reports suggest that a production dip in kharif may well extend to rabi pulses, with area sown in Karnataka and Maharashtra falling over the year-ago period. Two good crop years have, however, ensured an inventory build-up in pulses of over three million tonnes, with chana accounting for 2.5 million tonnes. Hence, an inordinate spike in prices, a situation that any government will try its best to avert in the context of elections, does not seem very likely. Indeed, subdued food price inflation has been a feature of the current government's rule. But if the consumer is not complaining, the producer certainly is. The policy challenge is to balance both interests. The key is to develop a procurement infrastructure in coordination with the States and use real-time data to calibrate procurement in order to smoothen out price volatility. It should be noted that the current prices, while being on the rise, are still below MSP levels. While procurement agencies are clearing stocks to make way for arrivals, they should ensure price stability.

The recommendations of the Arvind Subramanian committee on pulses, submitted in September 2016, should be implemented. These include removing stock limits and curbs on exports, allocating an additional ₹10,000 crore for pulses procurement, raising MSP for tur and urad to ₹60 a kg and creating a new institutional arrangement for pulses that facilitates coordination between all stakeholders. The current policy boost to pulses shouldn’t go to seed.

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