1. India needs strategy for dal production; here’s why

India needs strategy for dal production; here’s why

There is by now substantial agreement amongst analysts that a strategy for dal production which ensures supplies and a reasonable degree of self-reliance is sorely needed, and the country cannot go from one crisis to another without a well-worked-out policy.

By: | Published: November 15, 2016 6:23 AM
They already get the wrong signals, as Gulati points out, from the government’s support to wheat, and a partial import policy will make matters worse. It is of some importance that imports are made with a mild tariff and subsidised as they are even now. (Reuters) They already get the wrong signals, as Gulati points out, from the government’s support to wheat, and a partial import policy will make matters worse. It is of some importance that imports are made with a mild tariff and subsidised as they are even now. (Reuters)

There is by now substantial agreement amongst analysts that a strategy for dal production which ensures supplies and a reasonable degree of self-reliance is sorely needed, and the country cannot go from one crisis to another without a well-worked-out policy. However, the discussion is flawed on its assessments of what governments can and cannot do and on the lack of a short and medium strategy to enhance production. Former CACP chairman Ashok Gulati has endorsed the proposal that government use a fund to stabilise prices. But India’s pulse problem is not contracyclical. Funds work if you have to support prices in one year and sell in another to replenish your fund. The pulses problem is of an endemic shortage which keeps on rising. You will need subsidies and not funds. Earlier imports where around 2 million tonnes; but now they are in the range of 3.5-4.5 million tones and we are running on a downstairs case, so more maybe ahead. Again, governments have been notoriously poor managers of contracyclical policies. My friend Sanat Mehta, who passed away recently, set up a committee under me to solve the groundnut oil problem in Saurashtra. I wanted a contracyclical fund. Shankar Lal Guru, then a prominent market regulator of the Unjha market-yard, told me, “When I trade in mungphali (groundnut), even my munim does not know whether I am buying or selling. But your minister announces his policies, and so we are able to fleece him.”

Second, they want imports. If your policies are as bad as they have been, you will need imports. Since imports are expensive, and particularly given we are poor importers, the need for subsidies for urban consumers is felt. But that will give very wrong signals to the country’s farmers. Incidentally, imports and subsidies will subsidise foreign farmers, in Canada, the US, Australia as also in East Africa and Myanmar. India’s own farmers will suffer. It is like pouring water into a leaking bucket. We will give negative signals before the next rabi season to our agriculturists. They already get the wrong signals, as Gulati points out, from the government’s support to wheat, and a partial import policy will make matters worse. It is of some importance that imports are made with a mild tariff and subsidised as they are even now.

No one is worried about the future. A committee I had chaired on pulses strategy, of which the report is printed, worked on a short- and medium-term strategy to enhance production; it also included a Bt pulses seeds strategy. The report is gathering dust, after some activity when Sharad Pawar was the Union agriculture minister.

Then, of course, our old friend, the Essential Commodities Act, is there. So, there are stocking limits. Not only for traders, but retailers, exporters, importers, implemented by a so-called reform-friendly, market-friendly regime. Some ‘show’ raids are done and the figures of pulses obtained are touted. Not a single grain of pulse has been added to the nations granaries, apart from those touted in the histrionics. If the past is any guide, and as many official reports have shown, such regulations are the major cause of black money. Also, may be, of corruption.

What is the government doing to enhance more production in the upcoming rabi season? Who is responsible for that, since the Planning Commission has been abolished? Unless perverted policies are followed, the price signals are there for the kisan. A seeds policy is essential, as also availability of pesticides, as Rallis has shown in its I Shakti producer companies, which come from a committee I chaired when Arun Jaitley was the minister of corporate affairs. What is happening to the 4 million kisans who have moved to census towns, thousands of them, each crying for market infrastructure; not the APMC structure, thank you? If the government were to support the kisan in what he does, it would never regret it. Can we assure him that the dal he produces will be purchased at 50% above the support price, way below the import price in terms of landed costs in the consuming centres? We supported him in 1975, 1988 and 2008 and he never let us down. Its time we got our act together again.

The author is chancellor, Central University of Gujarat and vice-chairman, Sardar Patel Institute of Economics & Social Research. He is also a former minister of power, planning, and science & technology

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