Jun 30, 2015

What needs to be done in boosting domestic production of pulses

As dal prices go on an upswing, a harried government is trying to focus on increasing domestic production. When Prime Minister Narendra Modi called upon farmers to grow more pulses to reduce the dependence on imports, he was not only voicing concern over the rising import bill, but also wanting the country to become self-sufficient in pulses production.

Prime Minister is right. All efforts to increase production of pulses in the past few years have not borne fruit to the extent desired. Although domestic production had reached a high of 19.25 million tonnes in 2013-14, falling to 17.38 million tonnes the next year in 2014-15, but still India’s import of pulses continues to hover around 4 million tonnes. This is primarily the reason why the trade finds it convenient to raise prices at every given opportunity.

In the past one year, a 64 per cent hike in the prices of pulses has been observed with most common pulses available at a price exceeding Rs 100/kg in the retail market. Much of this jump in prices has been seen in the past 3-4 weeks after reports of an impending drought in kharif became more pronounced. To add fuel to the fire, the statement by Road Transport Minister Nitin Gadkari, assuring the nation that the government will import large quantities of pulses to meet any shortfall expected in the markets, is expected to send international prices soaring.

The same mistake was earlier committed by the former Agriculture Minister Sharad Pawar.  Some years back when he publicly stated that India will import sugar to offset domestic shortfall in production, international prices had swung to a record high. Consequently, the import bill on sugar grew. This is also true for India’s import of chemical fertilizers. India’s demand for fertilizer is instrumental in keeping international prices high on an expectation of increased imports. In fact, how much will be India’s fertilizer import is something that has been monitored by the global trade very meticulously.

Ever since the weather forecast indicated an overall fall of 12 per cent in monsoon rains, prices of pulses – both nationally and internationally – have gone up drastically. According to reports, the future prices of tur from Myanmar had gone up from $ 800/tonne to $ 1150/tonne. Similarly, the futures prices for chana in Australia swung from $ 550/tonne in March t $ 775 tonne in June. Much of India’s imports are from Canada, Australia, Myanmar, Russia and Ukraine.

Although the government has raised the Minimum Support Price (MSP) of some of the important kharif pulses, price alone may not be enough to raise production in the long run. While the price of tur and urad have been raised by Rs 275 and of moong by Rs 250 per quintal, the idea being to give a message to farmers to shift more area towards pulses, I have always felt that unless the government launches an assured procurement programme for pulses, there is little hope. What has been achieved in wheat and rice is what exactly needs to be done in case of pulses.

Augmenting production of oilseeds and pulses in 60,000 villages, with the Indian Council of Agricultural Research (ICAR) holding 6,000 crop demonstrations over the years, is certainly welcome. But what is required is a two-pronged approach if the government is anywhere serious in boosting domestic production of pulses:  

1.   1.  Pulses attract zero per cent import duty at present. As long as import tariffs are not raised substantially, imports will continue to act a dampener against any move to raise production. The Commission for Agricultural Costs and Prices had recommended raising the import tariffs to 10 per cent, and the Ministry of Agriculture had been toying to hike it to 20-30 per cent. It is high time the import tariffs are raised substantially.

2.    2. The hike in import tariffs has to be accompanied by a nationwide programme to ensure procurement of pulses by the State agencies. What deters farmers from undertaking cultivation of pulses is the volatility in market prices and the lack of an assured market. If only the State governments were to step in and purchase every grain of legume that flows into the markets, India will witness an unprecedented jump in pulses production. #

      *What needs to be done in boosting domestic production of pulses. ABPNewsTV. June 29, 2015

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