No feel for the pulse -Ashok Gulati & Smriti Verma

-The Indian Express

Prices crashed last year because there was a glut in imports during a year of record production. Government has not corrected the policy snags that led to this anomaly.

Pulses are an interesting and unique commodity group in the Indian agri-food space. The country ranks first not only in their production and consumption, but also their import. Domestic absorption in recent years (2012-13 to 2015-16) has hovered between 21 million metric tonnes (MMT) and 23 MMT, while domestic production has ranged from 16.4 MMT to 19.3 MMT. But last year (FY 2016-17) was an anomaly that has confounded many a keen observer of this sector. In 2016-17, India witnessed its highest ever domestic production of pulses — a staggering 22.95 MMT. The record production can plausibly be attributed to a normal monsoon in 2016 after two consecutive drought years, high market prices of pulses prevailing at the time of the kharif sowing and steep hikes in the Minimum Support Prices (MSP) — up to 9.2 per cent for kharif and 16.2 per cent for rabi pulses. These favourable conditions significantly drove up kharif acreage to almost 36 per cent above normal. The production of kharif pulses increased by nearly 70 per cent in 2016-2017 over that of the previous year and the total production of pulses increased by about 40 per cent.

Normally, in a year of such bumper production, imports would be expected to fall significantly and one would assume India to have become self-sufficient in pulses — a goal that had its origin in the Technology Mission on Pulses, nearly 27 years ago. However, the reality was very different. India imported a record 6.6 MMT of pulses, valued at nearly $4.3 billion (see Figure 1) at zero import duty. As a result, domestic supply of pulses in 2016-17 shot up to 29.6 MMT, way above the typical supply of 22-23 MMT. No wonder this glut in domestic supplies caused wholesale prices to crash, despite a bold and first-of-its-kind effort by the government to procure around 1.6 MMT of pulses.

In February 2017, tur prices were Rs 3,914 per quintal in Akola in Maharashtra and Rs 3,256 per quintal in Hubli in Karnataka, much below the MSP of Rs 5,050 per quintal. Moong prices crashed to Rs 3,000 per quintal in Pali and Rs 3,400 per quintal in Tonk in Rajasthan — MSP for moong being Rs 5,225 per quintal.Urad prices plunged to Rs 3,690 per quintal in Harda and Rs 4,000 per quintal in Raisen in MP against an MSP of Rs 5,000 per quintal. In such a climate, the MSP announced by the government for moong, Rs 5,575 per quintal, for the kharif marketing season, 2017-18, shows that the policymakers are totally divorced from the plight of peasants or are simply anti-farmer. This price does not even cover the projected cost of production, Rs 5,700 per quintal. If there is no change in the government’s methods, we may either witness a decline in production of kharif pulses or another price crash this year.

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The Indian Express, 11 September, 2017, http://indianexpress.com/article/opinion/columns/pulses-prices-crashed-production-government-policy-4837585/

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