Pulses prices: Delay in Govt intervention fueled Farmers’ anger

The Government of India woke up to its responsibility of providing fair price for pulses and oilseed growers last week when it raised the minimum support price (MSP) for both these agricultural products for the 2017-18 crop year.

The support price of pulses has gone up from ₹350 to ₹400 per quintal. The MSP of tur (pigeon peas), for example, has been fixed at ₹5450 per quintal, as against ₹5050 stipulated in 2016-17. Similarly, the MSP of Urad has been raised from ₹5000 to ₹5400 per quintal. The support price of Moong Dal has gone up from ₹5225 in 2016-17 to ₹5575 per quintal in 2017-18.

The MSP of oilseeds for 2017-18 has gone up in similar proportions – that of soyabean has been fixed at ₹3050 per quintal, sunflower seed at ₹5300 per quintal, nigerseed at ₹4050 per quintal and groundnut-in-shell at ₹4450 per quintal.

The government decision to raise these support prices came after the Reserve Bank of India (RBI) drew its attention to the rapidly falling prices of the pulses due to overproduction in 2016-17 crop year. “In the last one year, as per data available with the department of consumer affairs, wholesale rates of tur dal have dropped by 54 per cent, while that of urad has fallen by 40 per cent,” a report said.

But perhaps this government intervention came too late in the day, after many pulses and oilseed growers, deeply affected by the sharply falling prices in the last crop year, decided to switch to other crops like cotton which gave a healthy return last year.

A report in the Business Standard (June 17) said: “Increasing farmers’ anger against falling prices of their produce, mainly pulses and vegetables, seems to have hit initial sowing of the former with the crop being planted in around 39 per cent lesser area than last year as on June 16.”

In fact, the report referred to the data provided by the ministry of agriculture showing that “acreage of all major kharif pulses be it arhar, urad and moong is less than last year”.

As per the data, “… area under arhar is around 82.51 per cent less than last year, while that under urad is around 27 per cent less than last year. The area under moong as per initial sowing is around 52.53 per cent less than last year till June 16.”

The report went on to say: “Competing crop like cotton seems to have gained with its area increasing by 36 per cent till June 16 as compared to the same period last year.”

Despite the meteorological department’s forecast of a normal monsoon this year, the initial negative trends for pulses and oilseed production is a matter of concern. Had the government been serious about arresting the fall of prices of pulses and oilseeds and, consequently, the farmers’ switch from food crop to cash crop, then it should have announced the increase in the MSP of these products well before the onset of the kharif sowing season. By doing it as late as mid-June, the government cannot put the clock back, at least for this season.

But then merely announcing the enhanced MSP for pulses and oilseeds is of no major consequence unless the government backs it up with a pro-active procurement policy. The MSP for rice and wheat are of great value for the farmer as the government agencies are policy-bound to ensure physical procurement of these food crops.

But, in the absence of any government initiative to procure the pulses and oilseeds, the MSP merely sets a benchmark; it does not provide the farmer a remunerative practice, especially in situations where there is a bumper crop as it was the case last year.

As per the records, the pulse production in India in 2016-17 went up by 35 per cent (22 million tonnes) compared to the crop year of 2015-16. Similarly, the oilseed production last year soared 33 per cent to yield an output of 34 million tonnes.

Strangely, despite this bumper crop, the Government of India did nothing to discourage the import of pulses and oilseeds which was a prevalent practice in yesteryears on account of the shortage in the production compared to the demands of these food items.

The bumper domestic crop, combined with almost 6 million tonnes of import of pulses led to the crashing of the prices and the misery of the farmers producing this crop.

After all, it was at the behest of the Prime Minister Narendra Modi’s clarion call to farmers in 2015 to produce pulses and oilseeds on a large scale and make India self-dependent in these nutrition-enriching food items that many farmers switched to pulses and oilseed production last year. They fulfilled the Prime Minister’s wish but they themselves faced misery on account of the softening of the prices. Therefore, chastened by the disastrous experience, many of these farmers have chosen to shift to cotton production which yielded a good price last year.

Could the Modi government have averted this disaster? Yes, if it had the vision to do the forward planning and sync the domestic with the foreign business policy. First of all, the government woke up to the reality of a glut in pulses production and, consequently, the suffering of the growers on account of low prices almost four months after the crop was harvested. The government then levied a 10 per cent import duty. The reality was that most of the imports had by then already taken place. Moreover, most of the imports of these items are from Myanmar and East Africa which are exempt from import duty as per the bilateral agreement.

What was more surprising was that, despite the evidence of massive increase in the area of pulse and oilseed production in 2016-17, our Prime Minister signed an agreement with Mozambique in July last year to import one lakh tonne of pulses from that country. In fact, the Prime Minister held out the promise to Mozambique that it would procure every grain that the latter produced at a price commensurate with the minimum support price meant for the domestic growers.

It is not all. As late as October last year, our government held out an olive branch to the BRICS countries to produce and export pulses and oilseeds to India. As Brazil did not grow pulses, the Indian government was forthcoming to provide all support to that country to get into its production. To cap it all, India promised to procure the entire produce from Brazil at internationally competitive prices.

The question is: if India could promise to buy the entire produce from several countries, why can’t it mete out the same treatment to the domestic growers?

Why was it that India procured a mere two million tonnes of pulses from the domestic market out of the 22 million tonnes (barely 10 per cent) of the food crop harvested last year while it is willing to procure the entire pulse production originating from Mozambique and Brazil?

Clearly, the ‘Made-in-India’ stance of our government rings hollow.