Trade Talk

December 21, 2023

Navigating India’s pulses market/
"It's crucial to acknowledge the complexities of the production-consumption gap”

Navigating India’s pulses market: Navigating India’s pulses market /

Michelle Dennis

Reporter

At a glance



Hi Rishabh, and welcome to the interview. Let's start by understanding the current scenario in pigeon pea (tur) production. Could you share insights into the deficit we're experiencing and how the recent release of 50,000 tonnes from the buffer stock has impacted the market?

Certainly. The current landscape of tur production in India reflects a challenging reality marked by a shortfall in production against the backdrop of robust domestic consumption. This disparity has resulted in a notable deficit, prompting the government's strategic decision to release 50,000 tonnes from the buffer stock. While the initiative is commendable, it's crucial to acknowledge the complexities of the production-consumption gap, and unfortunately, the impact on market prices remains somewhat marginal.

Could you elaborate on the government's measures to address rising tur prices and how the release from the buffer stock fits into the broader strategy for market stabilization?

Absolutely. The government has adopted a multifaceted approach in response to escalating tur prices. This comprehensive strategy includes not only the release from the buffer stock but also incorporates imports from East African countries and the imposition of stock limits. While these measures aim to provide immediate relief, the broader challenge lies in effectively bridging the consumption-production gap. The release from the buffer stock is a pivotal component of a broader initiative aimed at stabilizing the market and ensuring sustained availability.

How have issues like wilt disease and unseasonal rainfall contributed to the decrease in tur production? Additionally, what strategies are the government employing to mitigate these challenges?

Wilt disease, caused by the soil-borne fungus Fusarium udum, has led to a substantial 30-40% reduction in yield. Recognizing the severity of these challenges, the government has proactively initiated strategies to mitigate their impact. Promoting crop rotation and advocating for seed treatments with fungicides are among the key measures undertaken to enhance the resilience of tur cultivation against environmental adversities.

How effective have stock limits been in preventing hoarding, and what do you anticipate will be the impact on retail prices in the coming months?

Stock limits have undeniably provided a temporary respite, yet their efficacy in stabilizing prices has been rather fleeting. Despite rigorous government surveys finding no evidence of hoarding, retail prices have experienced a substantial 40% surge. This suggests that while stock limits contribute to immediate control, broader market dynamics and production-consumption gaps continue to exert significant influence on retail pricing.

In the context of the current pulse price spike, how does the government plan to manage inflation while ensuring fair prices for farmers?

In response to the prevailing pulse price spike, the government is adopting a proactive stance to manage inflation while ensuring equitable returns for farmers. By directing farmers to increase tur production through measures such as raising the Minimum Support Price (MSP) and direct procurement via the Price Stabilization Fund (PSF), the government aims to strike a balance between consumer affordability and fair compensation for farmers.

Now let's talk about the decision to dispose of tur through online auctions. What led to this directive, and what outcomes does the government expect from this approach?

The decision to dispose of tur through online auctions is rooted in the government's strategic imperative to control rising prices until imports normalize. Online auctions are anticipated to introduce transparency into the process, fostering market stability through efficient and accessible mechanisms. This approach aligns with the broader goal of ensuring fair market dynamics and mitigating the impact of speculative activities on prices.

In light of farmers' preference for selling to traders and stockists, how is the government encouraging their active participation in procurement programs?

Recognizing the historical inclination of farmers to sell to traders and stockists, the government has implemented directives to NAFED and NCCF for direct procurement at market rates higher than MSP. This proactive step, funded by the Price Stabilization Fund, aims to incentivize farmers by providing a reliable market and encouraging their active participation in government procurement programs.

Shifting focus, what initiatives has the government taken to promote sustainable tur production, safeguarding the interests of both farmers and consumers?

In a concerted effort to promote sustainable tur production, the government has initiated a multifaceted approach. This includes the distribution of Seed Mini kits, the establishment of Pulses Seed Hubs, and the provision of production incentives. These initiatives collectively contribute to fostering sustainable agricultural practices, ensuring the well-being of both farmers and consumers.

Let's delve into chana. With sizable production, how is the government strategizing procurement, and what implications does this have for storage and future market dynamics?

The record production of chana has prompted the government to adopt a proactive procurement strategy, primarily centered around securing excess stock at the MSP. This strategic buffer stock not only serves as a safeguard against potential market fluctuations but also contributes to ensuring market stability in the future. The implications for storage involve a meticulous approach to warehousing, aligning with the government's commitment to effective market management.

How does the government plan to optimize the utilization of surplus chana stock, and what distribution strategies are being implemented?

NAFED's offer of excess chana to states at a discounted price reflects the government's commitment to optimizing the utilization of surplus stock. The distribution strategies, channeled through social sector programs, encompass avenues such as mid-day meals, integrated child development services, and public distribution systems. This ensures not only the efficient utilization of surplus chana but also contributes to essential social programs, fostering a holistic approach to food distribution.

Looking beyond borders, what challenges and opportunities do you foresee in exporting chana, and how is the government navigating the global pulse market?

The global landscape presents challenges and opportunities for chana exports from India. The rising global demand offers lucrative opportunities, particularly from countries like China, UAE, and Bangladesh. However, challenges such as low productivity, adherence to stringent international standards, and the short shelf life of chana necessitate meticulous planning. The government is navigating this complex global pulse market by emphasizing adherence to international quality standards, exploring innovative export channels, and engaging in strategic collaborations to enhance the competitiveness of Indian chana in the global arena.

How is the government addressing potential shortages in moong, urad, and tur?

The government's approach to addressing potential shortages in moong, urad, and tur involves vigilant monitoring, timely imports, and strategic releases from the buffer stock. This proactive strategy aims to prevent shortages and meet consumer demand, aligning with the government's commitment to ensuring the stability of the pulse market.

Wrapping up, how has the implementation of the Price Support Scheme (PSS) and MSPs affected the relationship between industries and farmers?

They have fundamentally transformed the relationship between industries and farmers. MSP, by ensuring financial stability and fair returns, has fostered a robust trust between the two stakeholders. This dynamic relationship supports sustainable agriculture and guarantees a consistent market for farmers, aligning with the government's broader vision for the holistic development of the agricultural sector.

Thank you, Rishabh, for sharing your comprehensive insights into the intricacies of India's pulse market. Your expertise sheds light on the challenges and innovative strategies the government is employing to navigate these dynamic landscapes.

It was my pleasure. Thank you for having me, and I look forward to continued discussions on the evolving pulse industry.

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