Assured procurement can boost pulses production

By Devinder Sharma
15 Jun 2010

Instead of encouraging Indian farmers to grow pulses by ensuring purchase by government agencies at attractive prices, suggestions are put forth to outsource production to other countries without comprehending socio-economic and political implications.

Production of pulses has gone down due to unfavourable
agri policies (photo: srefoodblog)

Every time you want to cook dal you have to think twice. There was a time when dal-roti was the common man's food. With prices hitting the roof, dal has disappeared from the poor man's platter.
For over 40 years now, dal production continues to stagnate. Production remains in the bracket of 140 to 160 lakh tonnes a year. To meet the gap in demand and supply, India imports roughly 30 to 40 lakh tonnes of pulses from Myanmar, Canada and Australia.
While you are wondering as to why India cannot produce 30 to 40 lakh tonnes more pulses every year, a Working Group of Chief Ministers has suggested that Indian companies be encouraged to buy land abroad to grow pulses, in order to meet the domestic demand. Formed in April this year, the Working Group is headed by the Haryana Chief Minister Bhupinder Singh Hooda, and also includes the Chief Ministers of Punjab, Bihar and West Bengal.

The draft report of the Working Group states: "We should seriously consider these options (of buying land abroad) for at least 20 lakh tonnes of pulses and 50 lakh tonnes of oilseeds for 15-20 years." I feel there can be nothing more stupid than this recommendation. Nor is there anything new in this suggestion. Many decades back, the then Agriculture Minister Balram Jakhar too had made a similar suggestion asking Indian companies to engage in contract farming for pulses in Africa.

All such fanciful ideas are cropping up at a time when common sense has disappeared from public policy. Cultivating pulses abroad and then shipping it back to India is one such idea. At a time when farmers in India are passing through a terrible distress, with more than 40 per cent farmers wanting to quit agriculture if given a choice, I thought boosting domestic production of pulses could be one approach to make farming more profitable.

"Indian companies can be encouraged to buy land in countries like Canada, Myanmar, Australia and Argentina for growing pulses under long-term supply contracts to Indian canalising agencies. Similarly, such arrangements can be made with ASEAN countries for securing oilseed supply," says the draft report of the Working Group of Chief Ministers. I find the recommendations of the Working Group of Chief Ministers not only a stupid assertion but also dangerous. This would mean that the country will gradually reduce dependence on its own farmers for producing agricultural commodities, and this is exactly what the agribusiness companies have been lobbying for.

First of all, let us examine why is that India is unable to produce more pulses? After all, an additional 30 to 40 lakh tonnes should not be much of a problem. Only a few days back, the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, had announced a hike by about 30 per cent in the minimum support price (MSP) for kharif pulses, including tur or arhar. The underlying objective is to increase production.

At the same time, the government has decided to pay an additional Rs 500 per quintal for pulses sold by farmers to the government purchase agencies. In other words, Rs 500 per quintal is the bonus for growing pulses and selling it to the government. The additional payment will not impact the retail prices as it is purely on the government account. It will cost the government an additional Rs 1,000 to Rs 2,000-crore.

By providing a respectable price to growers, the government has made its intention clear that it is looking forward to increase crop productivity by attracting more farmers to undertake cultivation of pulses. But what it has failed to visualise is that increasing the MSP for pulses is only one of the mechanisms to increase production. We need to understand that price alone cannot do the magic. If higher prices alone can increase production, the task would have been achieved long ago.
Higher prices have to be backed by an enabling environment for the farmers to invest in pulses or oilseeds. And this is where India has failed the farmers. Let me make it clear that production deficit is not due to dearth of technological innovations to improve productivity. The National Research Institute for Pulses, located at Kanpur, along with other research centres have already developed more than 400 improved pulses varieties. But production of pulses hasn't increased much.

Now where the problem lies is that even after the heady days of Green Revolution, what is not being realised is that the production of wheat and rice (the two most important staples) went up not because of the high-yielding varieties but because the policy makers had put together two-planks of what is called a 'famine-avoidance' strategy. With higher yields, production is expected to go up. But comes harvest, and the prices crash.

Assure farmers of procurement at attractive prices to boost production of pulsesProduction of mainly four crops - wheat, rice, sugarcane and cotton - has gone up because the market is assured through the FCI purchase or the Cotton Corporation of India or by the sugar companies.

To ensure that farmers get a remunerative price as an incentive to continue producing the same crop, the government started providing MSP or in other words provided an assured price to growers. Assured price certainly becomes an incentive for the farmer who would normally be squeezed out by the trade at the time of the harvest. At the same time, the government set up a procurement system through a network of mandis. Whatever flows into the mandis and is not purchased by the private trade is mopped up by the Food Corporation of India (FCI) and other government agencies.

This means that farmers got an assured price and an assured market. They know that the labour they put in to raise a crop does not go waste. And it is primarily for this reason alone that production of mainly four crops -- wheat, rice, sugarcane and cotton -- has gone up. These are the only four crops where the market is assured, whether through the FCI purchase or the Cotton Corporation of India or by the sugar companies, and therefore the production of these crops has been steadily on the rise.
Pulse production has not increased primarily for the same reason. Although the government has been announcing a procurement price, but there is no assured procurement of the produce. More often than not farmers growing pulses have to resort to distress sale in the absence of an assured market. Government's failure to provide an assured market has forced the farmers to avoid cultivating pulses. They prefer to cultivate wheat, rice or sugarcane where they know the government will buy their produce.

What is therefore required is that instead of encouraging Indian companies to lease out land abroad, the emphasis should be to identify the regions in India where pulses production needs to be encouraged, and then to set up a series of mandis. For instance, why can't parts of semi-arid Rajasthan, Madhya Pradesh, eastern Uttar Pradesh, West Bengal, Bihar, and even Punjab be identified for production of pulses? The government must give a commitment to farmers that from now onwards it will start procuring pulses in addition to wheat and rice.

The increase in procurement prices has to be accompanied by an assurance that whatever farmers produce will be procured. Just provide an assured market, and be ready for a bountiful supply of pulses all through the year. This will also rescue farmers in the inhospitable areas of the country. Pulses being crop of the marginal lands require less water and add atmospheric nitrogen to the soil. It will lead agriculture towards more sustainable farming systems, and also bail out the poor farmers from the poverty trap. Let us help our own farmers rather than provide more income in the hands of farmers abroad.