While tomatoes have been hogging the headlines, trouble seems to be brewing in a more essential commodity — pulses — with the South-West monsoon playing truant. Data from the National Food Security Mission (NFSM) showed a 16 per cent shortfall in pulses acreage this week. With large swathes of Karnataka and Maharashtra reporting deficient rains, tur (arhar) sowing has been badly hit with its acreage 42 per cent below normal, while urad is down 15 per cent. Moong has fared better with a 5.8 per cent gain.
A monsoon pickup over the rest of July would be critical for both the tur and urad crops, predominantly grown in the kharif months. As pulses are prone to sharp bouts of inflation every three or four years, this is yet another constituent of the food basket that policymakers need to keep a close eye on, to pre-empt resurgent inflation. India has made enormous strides towards self-sufficiency in pulses in recent years, with output expanding from 163 lakh tonnes in FY16 to about 275 lakh tonnes in FY23. This has pruned imports to a tenth of the domestic requirement. The output gains are a result of concerted extension efforts put in by the NFSM to promote pulses cultivation in irrigated areas. Farmers have been provided with short-duration drought-resistant varieties that can be sandwiched between the traditional kharif and rabi crops. Healthy hikes in the minimum support prices, backed by a price stabilisation fund and buffer stocks have been put in place. But these interventions have not managed to quell high price volatility in the pulses complex.
For one, much of the expansion in the pulses output in the last seven years has been driven by secular improvements in acreage of chana and moong. Similar success has proved elusive with tur and urad, with annual tur production swinging between 33 and 45 lakh tonnes and the urad crop hovering between 13 and 27 lakh tonnes. The large-scale availability of short-duration varieties of moong and chana, which has allowed farmers to plant multiple crops through the year, is yet to be replicated with tur and urad. These crops are also riskier and prone to pests. Two, though the government has tried to shore up farmer realisations through buffer stocking, price stabilisation and price support schemes, state procurement has worked mainly in the case of chana, with procurement targets for other pulses remaining unmet. Pulses procurement and buffer stocks may need to be diversified for farmers to see concrete gains from higher MSPs for tur, urad and other pulses.
With 2.3 per cent weight in the general Consumer Price Index, pulses inflation by itself cannot cause any major upheaval in the inflation print. But an errant monsoon that sets off periodic price spirals in food crops can prove a headache to an election-bound government. As a recent RBI study warned, whimsical monsoon behaviour doesn’t always spark food inflation. But food inflation once it takes hold, proves difficult to vanquish. The Centre therefore needs to closely monitor the price action in pulses so that supply-side interventions can be readied in time.