Skewed policies lead to spurt in prices of pulses

The output of pulses declined from 19.25 million tonnes (MT) in 2013-14 to 17.20 MT in 2014-15. On an average, India consumes around 23 MT pulses per year but production has stagnated at around 18-19 MT for several years now. Policy makers in India have been obsessed with encouraging production of basic food grains, ignoring importance of pulses

The price of pulses in Telangana has been skyrocketing again after recent decline from last November’s steep rise, in spite of the Centre’s order to sell them at low prices. The Centre has directed all State governments to ensure red gram (tur dal) availability at less than Rs 120 per kg in the retail market.

As per the civil supplies department, the tur dal price in Telangana as on 23th April, 2016 stood at Rs 138 to Rs 163 per kg. Tur dal is presently being sold for Rs 147.99 in the State, which is Rs 28 more than the Centre’s prescribed price. In reality, the market price for tur dal is Rs 170 to Rs 180 per kg, depending upon the quality. The price was at Rs 72.75 in the corresponding period last year.

The Minister for Civil Supplies, Etela Rajender, has stated that the prices of pulses, especially tur dal, has increased by Rs 50-60, due to consecutive droughts for the last two years. As a result, there was a toll on production of tur dal, leading to pressure on prices. The Telangana government has also requested the Central government to provide additional stocks to reduce the demand-supply gap and keep prices under control, while civil supplies and vigilance departments have been asked to conduct raids to cheek hoarding of stocks by traders.

The government is also planning to set up special counters at Rythu Bazaars across the State to sell tur dal for Rs 120. It may be recalled that the Central government has decided to release 10,000 tonnes of pluses, mainly unmilled tur dal, at Rs 66 per kg and unmilled urad dal at Rs 82 per kg from buffer stocks to all the States for retail distribution of milled/processed dals at not more than Rs 120 per kg.

All the States have been requested to immediately place their requirement for making allotment of tur and urad dals for retail distribution through their channels. Telangana has decided to seek 1000 tonnes initially to meet the demand. Further, all the State governments have been asked to release stocks available with them and approach the Centre for more stocks.

The production of red gram slipped down by 22 per cent in Telangana in 2014-15, compared to previous year. As a result, the price of red gram has been zoomed up across the State by 100%. The government is scrambling to retrieve the situation but here are five reasons why the red gram price is high.

Rain gods have not been benevolent
The monsoons have failed Telangana farmers for the second straight year, since less than one-tenth of area under pluses has irrigation cover, and the crop is entirely dependent on monsoon.

Production fell across India
India consumes around 23 million metric tonnes of pulses. A the pulses are the main source of protein for a very large number of people in the country each 100 grams contain about 32 grams of proteins and several amino acids not made by the body. So, it is an essential part of Indian meals. India is the largest producer and consumer of pulses in the world.

The output of pulses declined from 19.25 million tonnes (MT) in 2013-14 to 17.20 MT in 2014-15. On an average, India consumes around 23 MT pulses per year but production has stagnated at around 18-19 MT for several years now. The shortfall between production and consumption is made up by imports, mainly from Canada, Myanmar and some African countries. This balance has been maintained at huge cost of the people.

A population growing at the rate of 2% per year in the past decade should have quickly overtaken the pulses rate of growth, which was less than half of that. This has not happened, because the amount of pulses has relentlessly declined over the past several decades. From about 61 grams per person in 1951, per capita consumption declined to about 42 grams in 2013.

Plans to imports did not work too well
There isn’t much production of pulses outside of India. For example, the global output of total of pulses was about 70 MT in 2014-15, of which India accounted for more than 25 per cent. So when there is a crop failure in India, there is not much scope to import vast quantities to make up for the domestic shortfall. Even so, our imports peaked last year at 4.6 MT.

Hoarders worsened the situation
Domestic hoarders seem to be the key players responsible for the rising prices of pulses, especially red gram, besides new market entrants like MNCs and large firms that have entered trading. But the government ought to have cracked down on hoarders and black-marketers through an imposition of stockholding limits, but it seems that it has not materialised to some extent.

Not enough incentive to grow pulses
Since the 1970s, policy makers in India have been obsessed with encouraging the production of basic food grains like rice and wheat. Successive governments raised the minimum support price (MSP) for wheat and rice, virtually giving a guarantee to the farmer that their output of wheat and rice would be purchased by the State at the MSP. So India has a “buffer stock” of wheat and rice in excess of 60 MT. But no such incentives have been provided for pulses.

The consistent signal to farmers has been to focus on wheat and rice and neglect pulses. The total pulses output in 1970-71 in India was 11.8 MT. After two decades of the Green Revolution, the output went up to 14.3 MT. And that’s not all. The total output in 2000-01 was below the output achieved 30 years ago at 11 MT. During the same period, the wheat output had gone up five times and that of potato by about 10 times.

By G Rajendera Kumar