With the NDA government under Prime Minister Narendra Modi finding it electorally salutary strategy to be farmer-friendly by way of its mid-course policy correction, there is no end to which it is prepared to go to please kisans in its elusive quest for doubling their income by 2022.
That the country’s farm sector growth was hit by back-to-back droughts for the first two years of the NDA was well known but what was not widely known was that the government remained obsessed with other objectives of dubious nature than paying focused attention to retrieving the losing ground in the farm front.
But when the ruling dispensation headed by the BJP found its electoral comeuppance in State Assembly polls after the 2014 General Elections, it realised better late than never that it was losing the plot to present itself as a saviour of all stakeholders.
Even as the food inflation was being brought down thanks to a monetary hawk like Raghuram Rajan unrelentingly fighting the demon of inflation, the flare-up in the prices of pulses touching Rs 200 per kg a few months ago had caused consternation to the consuming public that the government was living up to its electoral credo of minimum government at the expense of maximum governance!
But with opposition always playing a party-pooper despite being scattered and in disarray, the Modi sarkar had to brace itself to face the onslaught given that election to the Punjab, Uttar Pradesh, and Gujarat Assemblies are imminent.
Successive droughts in 2014 and 2015 whittled down production of pulses from 19.25 million tonnes (mt) in 2013-14 to 17.06 mt in 2015-16. With demand lingering undiminished, imports of pulses surged from about 3.4 mt in fiscal 2013-14 to 5.8 mt in fiscal 2015-16.
Notwithstanding this noticeable spurt in imports of pulses, its domestic prices rose sky-high as worldwide supply situation became tight. A beleaguered government has swung into action setting in motion a raft of measures.
First, it enhanced minimum support prices (MSPs) for pulses and cereals for 2016-17 seasons. In order to goad cultivation of pulses within the nation, the government gave a bonus of Rs 425 per quintal for Kharif pulses, viz., arhar (tur), urad, and moong over and above the MSPs for 2016-17.
Alongside, it banned the export of all pulses except Kabuli channa and up to 10,000 tonnes of organic pulses and lentils. Import of pulses was allowed at zero import duty, while stock limits on pulses extended till end-September, 2016.
The government is also moving towards a much-desired stock policy for pulses. It has resolved to raise buffer stock of pulses from 1.5 lakh tonnes to 8 lakh tonnes; more recently, it has also proposed to raise the buffer stock to 20 lakh tonnes. The Centre has also impressed upon the States the need to delist pulses from the APMC Act and do away with local taxes on them.
Policy analysts contend that it would be good if the NDA-ruled states could adopt this as an example worthy of emulation by the rest before they test the waters on their own.
It needs to be noted that against the demand of 21 mt of pulses projected by the Working Group for 12th Five-Year Plan, their production for 2015-16 is estimated at 16.47 mt, leaving a gap of 4-5 mt which is met largely through imports.
Total area under pulses in the country in the past five to six years has been hovering over in the range of around 23 to 26 mt, depending on yearly variations in weather, rainfall situation, irrigation facilities and a general shift in the area to other competing crops.
Interestingly, high ruling prices for pulses and excellent weather conditions in most pulses-growing States have resulted in a perceptible push in more areas being brought under Kharif pulses over the last year with experts estimating a hefty 33 percent increase in new acreage under pulses.
This is bound to result in a cornucopia of Kharif pulses, easing price pressures during the oncoming festival season beginning October till January. Now that the situation on the pulses front has been improving, it needs to be sustained as domestic farmers are price-sensitive. In order to ensure a sustained growth in pulses’ acreage, favourable relative price spurs need to be kept up.
It is here that the recently released report headed by the Chief Economic Adviser, Dr Arvind Subramanian comes handy for the authorities to follow through. In a far-reaching suggestion, the Subramanian Committee underscored the importance of a new public-private partnership (PPP) institution to undertake procurement, stocking and disposal of pulses as part of official minimum support price operations.
The new body, in which the Centre may have 49 percent stake, an “anchor” private sector 26 percent and other public-private institutional entities holding the balance 25 percent—would not supplant the Food Corporation of India (FCI), NAFED, and other state procurement agencies, but provide competition to them. The eventual beneficiary is going to be the farmers by expanding the scope of buyers, the Committee reasoned.
For the imminent Kharif season, the panel has plumped for additional allocation of Rs 10,000 crore to the extant agencies in order to launch “a war effort to procure moong, tur, and urad at their respective MSPs”/ Prices of moong, now at around Rs 4500 per quintal in Rajasthan, have already plunged below the MSP of Rs 5225.
For tur and urad, current prices are a little above MSP but there is a good chance that they will go down further, the Committee has cautioned. The Committee has also pitched the MSP for the chana (chickpea) crop in the ensuing 2016-17 rabi season be immediately fixed at Rs 4000 per quintal (against Rs 3425 for 2015-16) along with Rs 6000 per quintal for both tur and urad to be grown in Kharif 2017.
The panel noted that farmers need to be recompensed for the heightened inherent risks in growing pulses because of weather, pest, and price shocks, besides the “social externalities” from using less water and nutrients relative to paddy, wheat, or cotton.
The cultivation of pulses spur soil rejuvenation and naturally fix atmospheric nitrogen without quaffing much water,the traits for which traditional farmers in the past in the country were habituated as such double crop or intercrop cultivation gave them added income and prosperity.
For the BJP government trying to restore pride and primacy to the primary sector, the time has come to translate many of the sound suggestions from various official and unofficial committees into meaningful action and gains to the stakeholders and to keep the granaries overflowing to fight rural poverty and migration. IPA
(The views expressed are strictly personal.)