The predictions of below-normal rainfall seem to have become a major concern for the growth of agricultural sector in general and kharif crops in particular in 2014. Agriculture is an important sectoral constraint of growth. Even a small shortfall in agricultural production can cause serious distortion in the economic growth of the country.
Recently, the India Meteorological Department has lowered its forecast for the monsoon to 93% from the
95% estimated earlier. It has reported that most parts of the country, except north-east could receive less than normal rainfall. The rains in
Madhya Pradesh, Rajasthan, eastern Uttar Pradesh, Gujarat, Maharashtra, Odisha and Chhattisgarh are expected to be 94% of the long-period average (LPA). These areas grow most of the kharif pulses, oilseeds, cotton and coarse cereals.
The possible negative impact on production of pulses and oilseeds is a serious concern since the country regularly depends on imports to bridge the demand supply gap. Pulses are still a major and cheaper source of protein for sizeable poor who cannot afford expensive proteins like meat, milk and poultry.
India is the largest producer and consumer of pulses in the world. It grows a large variety of pulses. In rabi season, chickpea (gram) and lentils (massar) are important crops while pigeon pea (arhar), green gram (moong) and blackgram (urad) are major crops of kharif season.
Kharif pulses are a weak component of pulse economy in India. The production of these crops grew at a slow rate due to declining acreage and slow improvement in productivity. These are largely cultivated under rainfed conditions with minimum use of inputs. At times, they do not receive protective irrigation. Among pulse crops, kharif pulses are at a great disadvantage in terms of yield rates. The yield level of arhar, moong and urad is much below gram and lentils.
Kharif pulses constituted around 31% of total pulse production in India in 2012-13. The share of arhar, moong and urad in total kharif pulse production was 50.18%, 23.18% and 31.75%, respectively. The productivity of kharif pulses was 569 kg/hectare against 850 kg/hectare for rabi pulses. Moong and urad showed poor productivity of 465 kg/hectare and 535 kg/hectare, despite the fact that these pulse varieties are largely consumed in several states of India.
India has been importing arhar, moong and urad on regular basis for almost two decades due to inadequate domestic production. India imported pulses worth R8,767 crore during 2011-12. It is a known fact that supply of pulses in the world market is extremely limited because only a few countries grow and export these protein-rich agricultural commodities. Therefore, arranging supplies immediately has its own constraints.
The predictions of sub-normal monsoon across the country in 2014 could make the task of taming food inflation a challenge for the new government. This is true as the Consumer Price Index (CPI) rose from 9.10% in March to 9.66% in April, 2014. Since, the country has more than needed stocks of rice and wheat, there is hardly anything to worry about for these crops.
As of now, it is difficult to judge the exact impact of rain deficit on production of kharif pulses. Inflation in these commodities could rise due to expectations of relatively lower production in major growing states due to rain deficit.
The expectations of price inflation in kharif pulses call for immediate action in terms of policy measures. The agriculture ministry has announced some measures to contain the production damage and price spiral. Some of these measures are subsidies on diesel, seeds and interest subvention on crop loans. These measures may provide some relief to producers but arresting the impact of inadequate moisture to minimise yield losses is crucial. It requires conservation and storage of available rain-water for life-saving irrigation and its judicious use. Also, availability of improved seeds and efficient extension services need to be ensured.
It would be prudent to address structural constraints which create supply bottlenecks. These include efficient marketing, easy and timely availability of short-duration, improved seeds at affordable prices, efficient extension services and rain water harvesting to ensure protective irrigation at the time of long dry spells. The innovations in R&D of kharif pulse crops are the ultimate solution to enhance productivity.
Harvest prices of tur, moong and urad often fall below the Minimum Support Price (MSP) in several major growing states. This affects profitability of these crops and welfare of the farmers in terms of returns received from cultivating these crops. The dwindling profitability confirms the inherent bias of the farmers against pulses.
The National Agricultural Cooperative Marketing Federation (NAFED), the designated government agency responsible for the purchase of agricultural commodities, at the time of distress sale, purchased a miniscule quantity of tur and urad last year. But the scale of operations being low, it could not have any meaningful impact on prices. It is therefore, suggested that NAFED operations be enlarged under price support and commercial purchases at such crucial times.
In the recent past, protein items such as milk, meat and poultry have been the main contributors to food inflation in the country. Pulses are already quite expensive for the poor and common man. A further increase in prices of pulses due to short supply will reduce their consumption by these groups, adversely affecting protein intake.
A timely action to augment the supply of arhar, moong and urad is an urgent requirement to arrest the inflationary expectations. Imports of pulses are permitted under OGL at zero duty since June, 2006 to ensure the availability of pulses at reasonable prices. The immediate need is to increase the imports of these pulse varieties to avert any spike in their prices.
The possible impact of below normal rainfall in 2014 on production and prices of kharif pulses such as arhar, moong and urad can be minimised through timely action and management by the new government.
The author is acting director, Agricultural Economics Research Centre, University of Delhi