The Centre’s efforts to boost pulses output by raising support prices may come a cropper if the current trend of moong (greengram) prices ruling below MSP in producing States is not quickly addressed. As BusinessLine (September 7) has reported, moong prices are ruling below the MSP of ₹5,225 per quintal in major markets across Karnataka, Maharashtra and Madhya Pradesh following fresh market arrivals in recent days, prompting irate growers in northern Karnataka in particular to take to the streets. The Centre announced an 8-9 per cent increase in MSP for tur, moong and urad, as opposed to a 4 per cent increase in the case of paddy varieties, in an effort to bridge the five-six million tonne gap between stagnating pulses output (17 million tonnes in 2014-15 and 2015-16) and rising demand (23 million tonnes, and growing at about 1.5 times the rate of increase in per capita income). The promise of attractive support prices, coupled with good rain and elevated retail prices (the trigger for this policy response), prompted farmers to increase sowing under kharif pulses by four million hectares over last year to over 14 million hectares. Pulses output may touch 20 million tonnes this time, given the average yield of about 0.7 tonnes per hectare. This is a golden opportunity to generally lift the level of production, reduce reliance on imports, and address protein inflation and deficiency. However, to achieve the shift it is important that the Centre honours its price promise. A producer price slide may lead to growers losing faith in policy initiatives.

Even as pulses are primarily rabi crops (with the exception of tur, whose arrivals should start in November-December), it seems that the Centre has not backed up its kharif incentive with preparedness on the procurement front. This is despite its plan to create a pulses buffer of two million tonnes. Possibly surprised by the arrivals of the 60-day moong crop (its kharif and rabi output is usually less than two million tonnes, but could be more this time), the Centre hastily announced last week that procurement prices would come into force from this month rather than the next. It has to get its act together before the more substantial tur crop and contracted imports (an estimated three million tonnes in each case) start flowing into the market. To lift fresh arrivals at the committed price and stabilise prices, the Centre must involve the States and work out a mechanism to monitor both wholesale and retail markets. Outmoded policy tools such as stock limits and export curbs should be dispensed with. Policymakers should instead use futures judiciously to manage shortfalls, while allowing producers to export a good crop.

Diversifying procurement beyond wheat and rice, reducing leakages, lifting curbs on private trade and stepping up both the use of futures and e-markets will help ease supply-side issues. But the long-term solution lies in lifting productivity to at least one tonne per hectare, by focusing on technology and improving farm practices.

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