Concerned over a steep decline in domestic prices, in August 2017, vide two notifications, the Ministry of Commerce announced quantitative restrictions (QRs) on the import of select pulses — tur/arhar (pigeon pea), urad (black matpe) and moong (green gram) — by imposing an annual (fiscal year) quota of two lakh tonnes for tur/arhar, and three lakh tonnes for urad and moong combined.

The government moved the items from ‘free’ to ‘restricted’ category and specified that import shall be ‘as per procedure to be notified’. The sudden restriction surely hurt smallholders in Myanmar and East African countries such as Ethiopia, Tanzania and others who cultivate pulses solely for meeting demand in India. These smallholders are still reeling under huge losses.

Now, as if adding insult to injury, the Centre has failed to announce any procedure for import of these pulses for the fiscal 2018-19 although it is now well over three weeks after the start of the new financial year. What is holding up the announcement of the procedure is unclear; but indifferent and tardy implementation of the policy is sending out rather poor signals to the outside world about policymaking in the country.

Inconsistent policy

Last year in March, well before announcing QRs, the government first imposed a 10 per cent customs duty on the import of pigeon peas, little realising that the imports originated from Least Developed Countries (LDCs) and so exempt from Customs Duty. Imports continued until the blunder was discovered and QRs were hurriedly imposed but enough damage was done to domestic prices. Obviously, someone within the government messed up.

Be that as it may, it is imperative that the procedure for import of the specified pulses under the ceiling for 2018-19 is notified without delay. It is going to be a thankless job for the government to make quota allocation to numerous importers. There has to be equity in quota allocation and no single entity or a group should be allowed to dominate. Past performance should be taken into account. Individual ceiling may have to be specified and import performance monitored.

Import of split urad, moong

A close scrutiny of the two notifications uncovers something interesting. According to the notification dated August 5, 2017 import of pigeon pea/tur dal as well as split and other variations is restricted. In other words, raw pigeon pea (or whole tur/arhar) as well as split or milled pigeon pea (tur dal) are restricted for import.

However, for urad and moong no such restriction on splits or dal (milled) is specified in the notification dated August 21, 2017. This can be interpreted to mean import of raw or whole moong and urad is under a ceiling, but import of split that is urad dal or moong dal is not restricted. Whether the decision was well considered or it was a blunder is for the policymakers to clarify.

But relying on the August 21 notification, traders can start to import split or milled urad and moong known in the market as urad dal and moong dal. As there is no policy restriction, the Customs authorities will have to grant clearance.

Inadequate procurement

Handling of the pulse imbroglio since 2015 has exposed the ineptness of the government. Even now, despite the import restrictions, domestic prices of various pulses continue to rule well below the specified minimum support price. In other words, trade and tariff policies have failed to deliver. The procurement mechanism is ineffective. There is no concrete plan for disposal of inventory with the procurement agencies. No one within the policymaking circles seems to have any clue about ways to stabilise the market.

The writer is a global agri-business and commodities market specialist. Views are personal.

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