Reading the pulse

Reading the pulse

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The government’s decision to form a panel headed by chief economic adviser Arvind Subramanian to study and suggest ways to contain the rising prices of pulses is a welcome move. The committee is expected to frame a long-term policy, which will look into various aspects, including the MSP (minimum support price) and bonus paid to farmers. The committee will consider the issue of subsidising farmers who wish to grow pulses. Over the past two years, food price inflation, led by the sharp rise in the price of pulses, has been the central worry not just for consumers but also the government, which has been accused of mismanaging the food economy.

Thanks to back-to-back droughts, India’s domestic production of pulses has fallen to 17 million tonnes — a sharp fall from the high of 19.25 million tonnes in 2013-14. Not surprisingly, the first response was to import more. In 2015-16, India imported close to 6 million tonnes of pulses worth close to $ 4 billion. But this is already a huge chunk of the overall global trade in pulses, which stands at 15 million tonnes. That essentially means that the option of plugging gaps by means of increased imports has largely been exhausted. It is time for Indian policymakers to improve the supply conditions at home. Truth be told, pulses are an orphan crop, grown largely in rain-fed marginal lands in Marathwada, Vidarbha and northern Karnataka. If rains fail, overall production falls sharply leading to price surges. Pulses must be made a crop of first choice in the irrigated belts of the country. Farmers in the grain bowls of India, say, Punjab and Haryana, need to be incentivised to shift from wheat, paddy and sugarcane to pulses. Pulses consume less water, and much less urea. In fact, they fix the nitrogen from the air and should be sown to replenish the soil and reduce the need for excessive urea usage.

But a Punjab farmer will not shift unless the MSP, and the bonus, is attractive enough. Moreover, any such announcement must be made well in time for the farmer to sow pulses. There is an additional aspect for the committee to consider — dealing with plenty. This year, for instance, pulses may see a bumper crop. This, in turn, will lead to a crash in prices, as it happened with onions. If there is no mechanism in place to avoid such a crash in prices, farmers will again avoid sowing pulses in the next season, leading to another round of scarcity and inflation. It is time to put an end to this vicious cycle.

Read this opinion at : Reading the pulse
Source: Indian Express – Editorials

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