The price of pulses, the main source of protein for the poor Indian masses, is much higher than the cost of chicken but now it has become beyond their reach
Vinay K Srivastava | October 23, 2015
Gone are the days for the slogan ‘Dal Roti Khao, Prabhu Ke Gun Gao’ as prices of pulses are going through the roof. The rising prices of pulses have been a serious concern for common men in the recent years. Prices of these staples are soaring up all across the nation.
Pulses are consumed as dal, which has been a cheap source of protein and is considered as a common food for the poor section of the society. The price of pulses, the main source of protein for the poor Indian masses, is much higher than the cost of chicken but now it has become beyond their reach. The government is scrambling to retrieve the situation because the rise in prices of pulses may have direct impact upon the Bihar elections. The JD(U)-RJD alliance shall reap the benefit and BJP may suffer once again after the Delhi disaster. The central government is under attack for not doing enough to control the spike in the costs of pulses and other food grain items, which made the life measurable for the poor and common men.
The retail price of tur dal is shooting up to Rs 190 per kg in most parts of the country as against Rs 85 per kg a year ago. Similarly, the price of urad dal, which is the main ingredient in south Indian dishes including idlis, vadas and dosas, rose to nearly Rs 190 per kg from Rs 80 per kg. The gap between demand and supply due to fall in domestic production has stoked inflation in pulses. The million dollar question is, why is there constant inflation in food pulses?
The increasing price would affect breakfast and snacks of common strata of the society. This is bound to hit restaurants and snack stalls across the country catering mainly to the office goers. A food stall owner in Ghaziabad said that the cost of south Indian delicacies have been increased between Rs 10-20. As he reported that earlier he was charging a pair of Idlis with Sambar and Chutni Rs 20 and now he is charging Rs 30. Similarly, Dosas and Dal-vadas have seen a similar price hike.
The prices of food cereals have risen unabated for the past few months due to a fall in domestic output by about 2 million tonnes to 17.20 million tonnes in 2014-15 crop year due to uneven monsoon last year and unseasonal rains. It is not surprising, therefore, that pulses cultivation is very much a gamble on monsoon. Today, only 16% of the area for cultivation of pulses has access to irrigation. In comparison, nearly 93% of area under wheat cultivation and 59% of the area under rice cultivation has irrigation facility. This shows up in the lower productivity of pulses (6-7 quintals per hectare) that could be doubled with access to irrigation in these crops.
Food grain merchants are of the view that the rocketing prices are in response to the deficient monsoon leading to crop failure. They also predict that the prices are far from coming down and are expecting them to cross Rs 250 mark by the end of the year, before fresh produce hits the markets post the next kharif harvest.
Though India is the largest producer (18.5 million tones), it is also the largest consumer of pulses in the world and imports around 3.5 million tonnes annually on average to meet its ever increasing consumption needs of around 22.0 million tonnes. Nearly a quarter of our demand is met through imports. As per the vision document of the Indian Institute of Pulses Research, the population of the country is expected to touch 1.68 billion by 2030 and the pulse requirement for 2030 is projected at 32 million tonnes with anticipated required annual growth rate of 4.2%.
Against this backdrop, the government swung into action with a number of measures to check price rise including use of price stabilisation fund and imports to cool prices and create a buffer stock but there is no foreseeable relief. The centre has imposed restrictions on holding of pulses stocks beyond a ceiling by licensed food processors, importers, exporters as well as large departmental retailers and taken action against hoarders and black-marketeers to contain prices by increasing availability via imports and urged consumers to wait for some time to see results.
The government included importers, exporters, processors and big retail chains in the stock ceiling order, but if it puts a stock ceiling on importers, the result could be a temporary blip and the shortage situation could get worse. Stock ceiling will create further shortage of pulses. Currently, with no major crop in the country and the festival season round the corner, any government decision about stock limit will aggravate the situation instead of solving it.
Union minister Ravi Shankar Prasad commented, “There is a shortfall in production. To address the problem, the government is trying hard to boost supply through imports. The government is fully aware of the situation. Wait for some time.” However, Kendriya Bhandar and Mother Dairy’s Safal outlets are selling imported tur dal at Rs. 120-130 per kg in Delhi since October 16 in order to give relief to the common man. Andhra Pradesh and Tamil Nadu have also started selling imported lentils.
The centre is looking to purchase about 10,000 tonnes through state-owned MMTC and 3,250 tonnes have already reached the Indian shores. Further, an additional import of 2,000 tonnes of tur dal is being made to augment supplies and moderate prices of pulses, but it is too little to soften prices as per the given the demand. So, the government has to import at least 50,000 tones of pulses rather than placing orders merely of 5,000 to 10,000 tonnes to bring down prices.
To counter with situation, the measures may be counterproductive as the announcement of the central government to import pulses will only lead to further flare up in international prices. It will not help tame domestic prices, which are lower than the international market, unless the government gives a substantial subsidy on imported pulses. Even if the government gives a subsidy of 15 percent, it will not help to reduce domestic price as the international prices will move up substantially due to India's entry in the market.
An inter-ministerial group headed by finance minister Arun Jaitley reviewed the price situation as rates peaked to Rs 187-190 per kg in retail markets across the country. Jaitley said that the centre has decided to create a buffer-stock of pulses using the price stabilisation fund (PSF) to boost supply and check prices, take strict action against hoarders and black marketers, and encourage states to lift stocks of imported pulses, among others.
The state agency NAFED which is responsible for procurement of pulses has failed in its basic task to encourage farmers to grow the production of pulses and its failure means there is no alternative mechanism left for the government. The government should restructure NAFED to get it to achieve its aims.
The present minimum support price (MSP), i.e. Rs 3,175, is much less than the imported price of pulses, so the government should increase the MSP that will encourage farmers to shift more acreage towards pulses. If the government does not hike minimum support price of pulses and imports at high global prices, it is bound to attract criticism of favouring the farmers of Australia or Canada at the cost of Indian growers. A buffer stock should be built by procuring from farmers in the country and if 3-4 million hectares of irrigated paddy, wheat or sugarcane area can switch to pulses, there will be enough to procure as well.
Prime minister Narendra Modi has appealed to the farmers of the country to grow more pulses in order to avoid imports and become self-sufficient in pulses production. The government should calibrate R&D efforts towards growing more crop and seed varieties in pulses that can enhance the food product.
The government should also take some strong and deliberate action against the defaulters who create artificial scarcity of the food items and food grains. This needs a strict control and action to be taken in this regard. Furthermore, public distribution system should be made effective and be made available to the common men in the necessaries of the food items. Moreover, this situation can be rectified by taking rational decisions and with strong political will. We can hope that the prices of pulses may be fallen in the market on the back of certain government measures.
(The author is freelancer writer and managing editor of ARASH A Journal of ISMDR and honorary secretary of the Indian Society for Management Development & Research)
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