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Consumers Pulse Rate Wobbly by Pulse Price Spikes

G Srinivasan

 

 

The beleaguered NDA government is now waking up to the hard reality of rural resentment in general and the farming community in particular. Having romped home to power on the alluring ‘achhe din’ promise in the mid-summer election of 2014, the cup of woes appears overflowing to the ruling party at the Centre with the latest tear-jerker being the sky-rocketing prices of pulses, particularly the common and widely consumed dal.

In recent days, the price of tur dal has escalated from Rs 100 per kg last year to Rs 200 now with the prices of most other pulses orbiting in an obfuscating sphere to cause what a perceptive analyst deemed in earnest the “pulse rate jitters”! Having gone slow with the periodic hike in the minimum support prices (MSP) in case of cereals after it came to power, the NDA did not see the writing on the wall when the prices of pulses hit the roof because the support price to pulses seldom saw the sort of hike that was given to cereals. But this time round, it has announced hike in the official procurement price of chana and masur by Rs 325 per quintal in a bid to goad growers to plant more pulses that the country is in dire need of but on which costly import draining precious foreign exchange is being incurred.

That the zooming prices of pulses had not made the farmer any happier even as it overtly hurt the capacity of the consumers to afford this nutrient is now crystal clear. Equally perspicuous is the ineptitude and the indifference of the authorities in foreseeing the ferment in the pulses prices and forestalling the rampant rise in their prices, much to the chagrin of large sections of society that had of late switched over to a healthy dietary habit to include tur and other pulses in their consumption basket.

With a substantial swathe of households crossing points of inflexion in their dietary ways by transforming from cereal-dominant diets to augmenting share of proteins and vegetables, food inflation driven by pulses, other protein sources and vegetables including the poor man’s rich fibre onion, is now a given norm. This is despite the government’s risible sense of comfort and claim of the persistent fall in inflation, both the whole-sale price index based and consumer-price based.

India being the world’s largest grower and consumer of pulse, its pulse production plunged by nearly two million tones — from 19.2 million tonnes (mt) in 2013-14 to 17.2 mt last year, partly owing to a deficient monsoon in 2014 and unseasonal rains ravaging the rabi (winter) crop in April-May this year.

In 2014-15, the country contracted imports of nearly 4.6 mt or a quarter of the domestic consumption and a lower kharif output now mean imports could be higher in 2015-16. The country’s consumption is about 27 mt per year, with a running shortage of a staggering 10 mt that seems to be worsening in the absence of preemptive measures to boost domestic output through crop-specific intervention measures as are the case with cereals.

The kharif (summer) crop of pulses is going to be lower with the Centre having already to hatchet its estimates from 7 mt to 5.6 mt. The implacable impact of the 2015 drought on the principal pulse-growing States — Maharashtra, Karnataka and Madhya Pradesh — is fraught with future supply price pressures in the coming days.

The government has already contracted 10,000 tonnes of pulses from Australia, Myanmar and Tanzania, besides putting in place a spate of steps to control the runaway price. It set up a committee, invoked the Essential Commodities Act against traders and stockists, slapped stocking limits on dal mills, big retailers and warehouses, banned exports, reduced the import duty to zero and suspended future and forward trading so that speculative elements in commodity trading is discouraged.

A de-hoarding drive across the country mostly by states helped impounding of one lakh tones of pulses even as the centre is arranging imports of 10,000 tonnes when the shortfall is likely to be a staggering 45 to 50 lakh tones! The moot question is when the rain-fed crop is faced with a drought situation and alarm bells are sounded much in advance as far back as September last, the complacency on the part of authorities and the eagle-eyed proclivity of the traders/stockists went hand in hand to bring about this scandalous spike in the prices of pulse, much to the deep dismay of the consumers.

Belated actions as face-saving device will not do unless some basic facts are understood and necessary correctives undertaken to avoid price spike aberrations that will be well-nigh new normal more often than not in the future.

It is time the authorities mulled over instituting a buffer stock of two to three million tonnes out of domestic production/imports and release it when prices soar. The government can also foster a crop-neutral incentive structure for farmers-now more skewed to rice, wheat and sugarcane growers, leaving the cultivation of pulses unprofitable and uncared for.

Reputed agro scientists stress the need to underpin marginal farmers in resource-starved agriculture belts and give them research breakthroughs together with the support and subsidies extended to prosperous farmers of rice and wheat belts. Contract farming overseas with buyback volumes of output can be another option to minimize import-dependence as is being done in the case of energy.

With health conscious youthful population willfully foregoing basic agricultural produce such as rice and wheat in preference to protein-rich and fiber foods with dal and pulses occupying a major chunk in the evolving dietary predilections, it is time to help farmers in diversifying their crops.

It is also time the authorities thought out of box in fixing attractive MSP to farmers to grow pulses and other export-oriented crops. But the authorities are oblivious to this obvious fact.

How else they could reason out their hike in MSP by 5.2 per cent to Rs 1,525 per quintal for wheat this season? Last year farmers handed over 28 mt of wheat to procurement agencies, even with the Rs 50 per quintal MSP increase.

With MSP on wheat up by Rs 75 per quintal, they will only produce and deliver more of wheat to the public procurement agencies. A plausible course that would have made a real boost to farmers and sensible booster-dose to pulses production would have been fixing an MSP of around Rs 4000 per quintal, against the declared Rs 3500 per quintal for chana and Rs 3400 for masur  — a wantonly missed chance!

 

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