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Excess Supply of Pulses

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June 09, 2018

What is the issue?

  • The country witnesses an excess supply of pulses due to higher production.
  • The Centre must appropriately focus on demand side management and procurement, to deal with this.

How is the pulses market?

  • Two successively large harvests, large inventories and weak offtake in the market have resulted in excess pulses supply.
  • This has naturally kept the pulses prices low.
  • Government's policy interventions have had little impact on farm-gate prices.
  • Without exception, prices of all major pulses are well below the specified minimum support price.
  • Restrictions imposed on imports have failed to exert any meaningful impact on the domestic market.
  • These include the quantitative ceiling and customs duties.
  • Pulse growers continue to suffer low prices for the second year in a row.
  • This is sure to impact planting intentions for the upcoming kharif crop.

How to deal with it?

  • Demand - ‘Self-sufficiency’ in pulses could be advantageous only if the demand side is dealt appropriately.
  • Gains of the last two years have to be responded with demand side management.
  • But policy-makers have made a series of interventions to simply control supplies.
  • This was done in the hope that prices would rise closer to MSP, but this has not worked.
  • Boost consumption - India suffers pervasive under-nutrition and serious protein deficiency among large sections.
  • Excess protein-rich pulse production could be utilised to boost its consumption.
  • Legume could be included in the Public Distribution System or under National Food Security Act.
  • Supply of even one kilogram of pulses per family per month will go a long way in advancing nutrition security.
  • Centre's role - Relying on State governments’ choice to advance nutrition security is less likely to result in tangible outcomes.
  • Calorie and protein security should go together.
  • This responsibility must largely be assumed by the Centre.
  • Burdensome inventory with various stakeholders (growers, government, traders) must be reduced.
  • Government agencies themselves are reportedly holding well over a million tonnes of pulses incurring huge carrying costs.
  • These need to be liquidated.
  • Procurement - There is lack of political will to address the pulses crisis comprehensively.
  • Given the present concerns, procurement of pulses deserves to be strengthened.
  • Handling a few million tonnes of pulses should not be a formidable challenge.
  • There is a risk that pulses planted acreage and production may decline in the upcoming kharif season.
  • Growers are likely to shift from pulses to more remunerative crops.
  • Appropriate demand-side management and procurement policies would only prevent this.

 

Source: BusinessLine

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