Like pulses on your table? And, with a lot of variety? One of the nice things about the Indian diet, did you say? Well, if so, be prepared to pay a lot more for it, advise experts.
For, the thing is, this particular variety of staple suffers from a push-pull problem. The farmer who grows these is invariably hit with a cap to his return from doing so. Which is why India has long had the issue of growing a lot less than it consumes of this dish.
In the pre-2009 days, annual output seldom crossed 14.5 million tonnes. In 2009-10, imports peaked at about 3.5 mt. That excess of demand over supply helped boost prices (tur, for instance, rose to a little over Rs 100 a kg in retail markets) and farmers planted more in the next season. Imports, accordingly, dipped to 2.5 mt in 2010-11 and could be no more than 2.7-2.8 mt in the financial year ending this month. Domestic output has grown to around 17 mt.
The downside for growers is that this extra performance doesn’t pay. The prevailing domestic price doesn’t cover the cost of production. To take tur again, in Maharashtra, a big producer, prices have fallen below the state-fixed Minimum Support Price of Rs 3,200 a quintal. That’s Rs 32 a kg. “Tur growers in Maharashtra suffer from two basic problems. First, their cost of production has risen because of low yields and lack of technological breakthrough. Second, there is no organised marketing mechanism, so growers are forced to offload their produce at a price below the MSP,” says Ashok Gulati, chairman of the national Commission for Agriculture Costs and Prices.
And, the cause of the localised glut there, says Gulati, who recently extensively toured the pulses-growing regions of Maharashtra, was due to the same temporary rise in production fuelled by the good price received earlier. The observation is as applicable to the rest of the country. The sudden bursts of high prices impel farmers to shift some of their land to pulses, in the hope of better return, despite the high cost of production. Then, inadequate marketing facilities and rather localised processing infrastructure leads to a glut. Welcome for consumers and causing long-term damage to production growth.
“Pulses are largely a rain-fed and intermediary crop. Any shortfall in rainfall (also) pulls down its output,” says a veteran observer. “Pulses’ imports have been 2.7-3 mt in the past couple of years as domestic production stabilised. Domestic prices have to rise (for more availability),” said Bimal Kothari, vice-president of the Pulses and Grains Association. Gulati prescribes two things. First, a technological breakthrough in seeds (which has not happened in 30 years). Second, a 30-40 per cent rise in MSP to cover cost of production and a 10 per cent duty on imports, to bring parity between domestic and local prices. This would incentivise farmers to shift irrigated land for pulses.
“The rise in MSP could push up the domestic retail price of pulses by at least 35-40 per cent from the current levels, agrees Gulati. “To offset that, imports could be sold through the PDS (ration shops system).
In sum, you want more and better stuff, you need to be ready to pay for it. Else, what’s in it for the grower?
