Pulses: Focus on expanding demand

The government seems to be at its wit’s end in addressing the issues confronting the pulses market. New Delhi finds itself in an awkward position of having to face growers’ ire despite a spate of policy interventions that have had little impact on farm-gate prices. Pulse growers continue to suffer low prices for the second year in a row. This is sure to impact planting intentions for the upcoming kharif crop.

Without exception prices of all major pulses — chana, tur/arhar, urad, moong — are well below the specified minimum support price. Restrictions imposed on imports including quantitative ceiling and customs duties have failed to exert any meaningful impact on the domestic market.

The government’s response to the pulses market over the last three years has left much to be desired. In 2015-16, it failed to read advance signals of an impending supply crisis and responded to escalating market prices, especially at the retail level, through administrative action including imposition of stock limits, seizure of cargo and so on which left the distributive trade utterly demoralised and wary.

In 2017-18, the government is fighting another phenomenon — that of two successively large harvests, large inventories and tepid offtake in the market. While consumers suffered massive price increases in 2015 and 2016, it is now the turn of the pulse growers to suffer ultra low prices.

Boost consumption

For a country that suffers pervasive under-nutrition and serious protein deficiency among large sections of the population, a big rebound in protein-rich pulse production ought to be seen as fortuitous benevolence of nature. The opportunity should be seized to enhance pulse consumption.

It is common knowledge that pulses are among the most economically priced vegetable protein. Pulses are a basic ingredient of diet for a vast majority of the population and are a perfect mix of biological value when used with cereals. No wonder, Indians typically eat dal-roti or dal-chawal .

It is ironical that policy-makers have been busy in the last several months with a series of interventions that simply results in choking supplies in the vain hope that farm-gate prices will rise closer to MSP, if not exceed it; and it has not worked.

It is unfortunate that New Delhi has failed to recognise another aspect of managing the market that is the demand side.

It has failed to take steps to boost consumption demand. Instead of gloating over self-proclaimed ‘self-sufficiency’ in pulses (which is nothing but a chimera), the government ought to focus on serving the demand side.

An ideal and common sense approach to boost pulses consumption is by including the legume in the Public Distribution System or under National Food Security Act. Supply of even one kilogram of pulses per family per month in addition to rice and wheat will go a long way in advancing nutrition security.

Calorie and protein security should go together; and its responsibility must be assumed by the Centre. Relying on State governments’ choice to advance nutrition security is unlikely to result in tangible outcomes, if experience is any guide.

The immediate priority is to reduce burdensome inventory with various stakeholders (growers, government, traders). Government agencies themselves are reportedly holding well over a million tonnes of pulses incurring huge carrying costs. These need to be liquidated.

At the same time, procurement of pulses deserves to be strengthened. Procurement efforts of last two years have left much to be desired. For a government that mops up as much as 50-60 million tonnes of wheat and rice, handling a few million tonnes of pulses should not be formidable challenge. It is simply that there is no ‘political will’ to address the pulses crisis comprehensively.

Already there is a risk that pulses planted acreage and production may decline in the upcoming kharif season. Growers are likely to shift from pulses to more remunerative crops. It would be a tragedy if it is allowed to happen and the policy-makers must be held accountable. Gains of the last two years, in terms of higher production, will be squandered without a robust demand side management.

The writer is a policy commentator specialising in global agribusiness and commodities market.

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