The Narendra Modi government has done well to hike the minimum support prices (MSP) of pulses to be grown this kharif season by 7.7-9.2 per cent, over and above the 5.4-6.3 per cent last year. Besides, the MSPs of kharif oilseeds such as groundnut and soyabean have also been raised by 4.7-6.7 per cent this year. Seen against the mere 3.7 per cent and 4.2 per cent increases granted for paddy in 2015-16 and 2016-17 respectively, the signal to farmers is clear: Grow more crops that India is short in and that also guzzle less water.
In 2015-16, India imported a record 5.79 million tonnes (mt) of pulses valued at $ 3.9 billion, with these being even higher at 15.57 mt ($ 10.49 billion) in the case of edible oils. On the other hand, stocks of rice and paddy in government warehouses are now more than twice the required minimum buffer norm. It requires no great perspicacity to realise the importance of diverting paddy area, especially in high-productivity irrigated belts, to pulses and oilseeds.
One can, in fact, go a step further and argue that the MSP rise should have been more, particularly in pulses where the options for imports are limited compared to palm, soyabean or sunflower oil: The total global trade in pulses, at around 15 mt, is less than India’s production of 18-19 mt in a normal year.
The latest announced MSPs of Rs 5,050 per quintal for arhar (pigeon-pea) and Rs 5,000 for urad (black gram) are also way below their current wholesale mandi prices of Rs 9,000 and Rs 10,000/quintal respectively. If the idea was to incentivise the Punjab or coastal Andhra Pradesh farmers to switch to pulses, the MSPs ought to have been fixed closer to market levels; say, at least at Rs 6,000 per quintal. But such lateral out-of-the-box thinking is, perhaps, too much to expect from the bureaucrats in Krishi Bhawan.
That said, even the new MSPs can make a difference if backed by actual physical government procurement. In the past, farmers have had bitter experience with pulses cultivation precisely for the lack of proper official intervention in the event of open market prices crashing. There was a period only two-three years ago, when chana (chickpea) was selling in mandis at Rs 2,500-2,600 per quintal, as against the corresponding MSPs of Rs 3,000-Rs 3,100 that were clearly on paper.
Farmers need to feel confident that the government would, indeed, procure if a good monsoon this time results in a bumper crop and pushes prices below MSPs again. And it’s any day better for the Food Corporation of India to procure 2-3 mt of pulses than 25-30 mt of wheat and 30-35 mt of rice.