New Delhi: Just ahead of Prime Minister Narendra Modi's Africa visit beginning today, the Union Cabinet approved a long-term contract with Mozambique on Tuesday for importing pulses. This arrangement will be in force for five years and will double pulses imports from the African country from a lakh tonne at present to two lakh tonne by 2020-21.
This will augment domestic availability of pulses and thereby stabilize prices, the government said in a statement. Mozambique is India's destination for the popular arhar and urad daals. On the face of it, the government has done well to sign up with this African country for increased imports but this does not begin to even scratch the surface of India's overall pluses problem.
According to industry estimates, India consumes about 63,500 tonnes of all varieties of pulses put together every single day (2.3 crore tonnes is our estimated annual consumption). With a bad monsoon year, pulses production plateaued in 2015-16, leading to a huge spike in prices during the last festival season.
Unless India takes a 360 degree view on pulses, even a combination of one good year of monsoons in 2016 and government-to-government pacts with African countries are unlikely to solve the pulses' conundrum for the long term. India remains the biggest consumer of pulses and has traditionally focused on cereals like wheat and rice, relegating pulses' cultivation to the background.
"The government needs to formulate a stable pulse policy. The policy should encompass production, processing, consumption and trade. I would say, as a crop, pulses have not received adequate policy support, research support and investment support (unlike rice and wheat). Growers need more remunerative prices and assured marketing outlets. Consumers deserve protein rich pulses (economical source of vegetable protein) at affordable prices," said agri business and commodities expert G Chandrashekhar.
What is needed is a sustained effort to raise domestic production of pulses instead of relying on increased imports - according to the government's own revised estimates, total pulses production in the country during 2015-16 was estimated to be 1.7 crore tonne while 57.9 lakh tonne of pulses were imported to meet the domestic requirements. The domestic production was thus far short of the initial government target of 2.05 crore tonne. And imports accounted for a third of pulses procurement last fiscal.
This increasing dependence on imports with little focus on enhancing in-house production is the crux of India's pulses' problem. As a country, we have increased focus on cultivation of cereals to such an extent that their production now outstrips demand. But for pulses, India has lacked a consolidated policy for production, distribution and imports. By increasing the minimum support price for pulses (done sometime back) and by signing small import contracts with African countries, we will solve very little of India's pulses' headache.
A bad drought which crippled the meager production of pulses in 2014-15 lead to a sharp spike in the prices of this essential food item last festival season. B Krishnamurthy of Four-P International Pvt Ltd, a importer and miller of pulses, points out that any long term solution to the pulses' shortfall has to be an increase in domestic production. "Solution should result in higher production irrespective of what happens to climate. What if there are two more droughts?"
Much of India's pulses' production happens on marginal lands under rain fed conditions across Madhya Pradesh, Maharashtra, Rajasthan and Uttar Pradesh. Only 15 percent of the area under pulses cultivation has assured irrigation. Hence the monsoon has a direct effect on pulses' production in India. This in itself needs to change, pulses' cultivation should be protected from vagaries of weather.
Niti Ayog member Ramesh Chand was one of the authors of a piece published in the Hindu today where it was pointed out that productivity of pulses is very low in India due to several reasons. High-yielding varieties of pulses haven’t been developed in the absence of any technological breakthrough. Low productivity is also associated with the sharp year-on-year fluctuations due to high vulnerability to environmental stresses as well as insects and pests. "There is an urgent need to upgrade varieties, practices and policy support for pulses. Both public and private sector research should be encouraged and supported for breakthroughs in pulse technology at the earliest."
For the short term though, the pulses' problem seems to have a solution in the rain gods and increased imports. Pravin Dongre, Chairman of the India Pulses and Grain Association said over 30 lakh tonne of pulses have been contracted by Indian importers for this year's festival season. "Coupled with good monsoon, we will see a large acerage shift to pulses. Good domestic crop coupled with increased imports will bring a sharp downward correction across the pulses' basket starting September".
Dongre welcomed the government's move to enhance arhar imports from Mozambique. On its part, the government has indicated that pacts similar to that signed with Mozambique will also be inked with Myanmar, Malawi and Canada to further ease the price of pulses. Speaking to media earlier, Commerce Minister Nirmala Sitharaman had said that unlike the present regime, where traders are free to import pulses, India has begun talks with these countries for striking a G2G pact on pulses' import. This will mean government's own agencies will buy pulses from these countries instead of only private traders, and then these agencies will release the stock into the market at an appropriate time, to keep prices in check.
This G2G route will help cool domestic prices. Media reports suggest that the Indian government will assist Mozambique by providing high quality seeds and technical assistance besides giving an assurance to buy all pulses grown there.