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Sunday, August 01, 2021

Stock limits on pulses: Govt order flies in face of farm law

On Friday, the Department of Consumer Affairs (DCA) issued an order to impose stockholding limits on all pulses, barring moong or green gram, for a period up to October 31, 2021.

Written by Harish Damodaran | New Delhi |
Updated: July 4, 2021 7:10:00 am
On January 12, the Supreme Court stayed the implementation of all the three laws “until further orders”. (Representational Photo)

The Centre’s three farm reform laws have not just been stayed by the Supreme Court, but effectively buried by the Modi government that got them passed in Parliament and gazetted in September 2020.

On Friday, the Department of Consumer Affairs (DCA) issued an order to impose stockholding limits on all pulses, barring moong or green gram, for a period up to October 31, 2021. The limits have been fixed at 200 tonnes for wholesale traders and importers, and 5 tonnes for retailers. The stock limit for processors/dal millers has been set at the last three months’ production or 25 per cent of annual installed capacity, whichever is higher.

The new order is totally at variance with the Essential Commodities (Amendment) Act, 2020 that was one of the three laws whose repeal has been sought by farmer organisations.

This Act — against which the protests have actually been less compared to the other two laws that enable contract farming and purchase of produce outside state government-regulated markets — allowed clamping of stockholding limits only under conditions of war, famine, natural calamities of grave nature or “extraordinary price rise”. Moreover, the price rise threshold for non-perishable foodstuffs such as pulses was defined as retail inflation of 50 per cent or more over the levels prevailing in the preceding 12 months.

The DCA’s own data shows the all-India average modal (most-quoted) retail price of chana dal (milled chickpea) at Rs 75 per kg on July 2, as against Rs 65 last year at this time. The retail prices of tur/arhar (pigeon-pea), urad (black gram), moong (green gram) and masoor (red lentil) dals were similarly at Rs 110, Rs 110, Rs 103.5 and Rs 85 per kg, respectively, compared to their corresponding year-ago levels of Rs 90, Rs 100, Rs 105 and Rs 77.5/kg. In none of the dals did the price increase work out to more than 22-23 per cent, way below the minimum 50 per cent prescribed under the Act that was signed into law on September 27.

On January 12, the Supreme Court stayed the implementation of all the three laws “until further orders”. Further, it appointed a committee to make recommendations after listening to the grievances of the farmers and the views of the government relating to the laws. The panel, comprising two agricultural economists (Ashok Gulati and P K Joshi) and a farm leader (Anil Ghanwat), submitted its report to the apex court in a sealed cover on March 19.

Since then, there have been no further rulings or hearings by the Supreme Court, nor attempts by the government to vacate its stay. The implementation of the laws being technically on hold has, in fact, given the government the powers to reintroduce stockholding limits that were last lifted on May 17, 2017. The Essential Commodities (Amendment) Act wouldn’t have permitted this re-imposition in the case of pulses, even while it may have for edible oils where the current year-on-year retail inflation comes to more than 50 per cent in palm (from Rs 85 to Rs 135/kg), soyabean (Rs 100 to Rs 157.5/kg) and sunflower (Rs 110 to Rs 175/kg) oil.

The decision to bring back stock limits after more than four years – and just over nine months after the enactment of the “historic” farm laws – has seemingly been prompted by fears of rising food inflation on the back of an extended dry spell during the crucial sowing period for kharif crops.

The country received about 74 per cent above-average rainfall in May and 33 per cent during the first half of June. But the rains since then have been over 13 per cent deficient, with the northern limit of the monsoon not progressing after June 19. The India Meteorological Department said Saturday that no favourable conditions are likely to develop for the further advance of the southwest monsoon during the next five days.

The Agriculture Ministry’s last sowing report for June 25 showed the cumulative area planted under kharif pulses (mainly arhar, urad and moong) to be 16.7 per cent lower than last year’s corresponding coverage, while trailing 35.5 per cent in oilseeds (groundnut, soyabean, sesamum and sunflower). Mid-June to mid-July is the peak time for kharif sowing and all eyes are on the monsoon reviving sooner than later.

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