No feel for the pulse: 

No feel for the pulse: 

Context

In 2016-17, India witnessed its highest ever domestic production of pulses, but in spite of that prices crashed last year

What is the significance of pulses in India agriculture?

• Pulses are an interesting and unique commodity group in the Indian agri-food space.
• The country ranks first not only in their production and consumption, but also their import.
• Domestic absorption in recent years (2012-13 to 2015-16) has hovered between 21 million metric tonnes (MMT) and 23 MMT, while domestic production has ranged from 16.4 MMT to 19.3 MMT.

What is the reason behind the record production in 2016-17?

• The record production can plausibly be attributed to a normal monsoon in 2016 after two consecutive drought years, and
• High market prices of pulses prevailing at the time of the kharif sowing and steep hikes in the Minimum Support Prices (MSP) — up to 9.2 per cent for kharif and 16.2 per cent for rabi pulses.
• These favorable conditions significantly drove up kharif acreage to almost 36 per cent above normal.
• The production of kharif pulses increased by nearly 70 per cent in 2016-2017 over that of the previous year and the total production of pulses increased by about 40 per cent.

What has gone wrong?

• Normally, in a year of such bumper production, imports would be expected to fall significantly and one would assume India to have become self-sufficient in pulses — a goal that had its origin in the Technology Mission on Pulses, nearly 27 years ago.
• However, India imported a record 6.6 MMT of pulses, valued at nearly $4.3 billion at zero import duty
• As a result, domestic supply of pulses in 2016-17 shot up to 29.6 MMT, way above the typical supply of 22-23 MMT.
• This caused wholesale prices to crash, despite a bold and first-of-its-kind effort by the government to procure around 1.6 MMT of pulses
• If there is no change in the government’s methods, we may either witness a decline in production of kharif pulses or another price crash this year. That may spur another round of farm loan waivers.

What is the solution?

• The landed price of imported pulses should not be below the MSP of domestic pulses, else the MSP is irrelevant.
• For our farmers to have a level-playing field, exports of all pulses must be opened up without any quantity or minimum export price (MEP) restrictions. Export restrictions betray anti-farmer policies.
• Pulses should be de-listed from the Agricultural Produce Market Committee (APMC) Act so that farmers can sell freely to whosoever they like, enabling a better realisation for the agriculturalists and a compression of the pulses value-chain.
• The relevance of the Essential Commodities Act (ECA), especially the provision that imposes stocking limits, must be critically evaluated and the act should be amended drastically
• It is crucial to give the farmer right incentives — at least some reasonable margin above the cost of production
• Finally, futures trading should also be allowed for all types of pulses so that planting and selling decisions of farmers are based on a futuristic rather than a backward-looking price information