Pulses production needs further incentivisation

Pulses production needs further incentivisation

By SHAILENDRA TYAGI | NEW DELHI | 25 October, 2015


The abnormal hike in the prices of pulses is going to pinch consumers for some more time till the new kharif crop reaches the market by November-December this year. In the meantime, the government’s tough stand on hoarders and it’s action to import about 8,000 tones of pulses — of which 5,000 tonnes has already arrived — has started impacting the wholesale market. The hike in the price of pulses reinforces the perennial mismatch between its demand and supply.Pulses are grown both as a kharif as well as rabi crop. Last year’s weather shock adversely impacted the production of pulses grown in kharif and rabi season. The overall production of pulses in FY’15 was 17.2 million tonnes, which was about 2 million tonne less than the preceding year’s produce. This had widened the demand-supply mismatch even wider. “and that has started showing up in higher prices of pulses,” says Sunil Sinha, principal economist, India Ratings & Research. Moreover, the readily available weather information — which predicted less than normal rainfall this year — was cleverly used by traders and middleman to exploit the mismatch further. “ The fact that the price of arhar went beyond Rs 190 per kg proves that traders had taken a great advantage of this mismatch,” says Sinha, “as the price hike of this magnitude was not warranted by the supply shock.” Experts say that the prediction of less rainfall this year also forewarned the government about the price of pulses going up.This prompted the government to place the imports order. But, pulses, unlike rice or wheat, are not readily available in the international markets. Therefore, it takes about a month to execute the import order. Analysts say that to prevent such a scenario from happening, the government has to keep incentivising pulses production as it has been doing for the past several years. India remains the largest consumer of pulses and as the income of the lower strata goes up, the demand for pulses is likely to increase further. Since the total sown area remains limited, the emphasis on raising the productivity of pulses yield per hectare should also be undertaken.
 

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