Why the prices of pulses and dal have skyrocketed

The huge spurt in dal prices, touching Rs180 per kilogram and even Rs200 in some cities, has come as a dampener to the festive season, and raised questions about the policies of the government. For some years now, India has been resorting to huge imports of pulses to meet domestic demand and keep prices in check. The many variants of dal — arhar, chana, toor, moong, urad and masoor — are the primary source of proteins, and therefore the lifeline, for vegetarians in India, estimated to be 30 per cent of the population. The irony, if one may say so, is compounded by the fact that chicken, once considered a luxury for most people, has become cheaper than dal in many cities. This must not take away the fact that even among non-vegetarians, dal is a staple diet. Due to high meat prices, India has one of the lowest per-capita meat consumption rates. Study after study has blamed India’s high malnutrition rates and stunted growth among children on low protein intake. But saddled with a huge one billion-plus population, of whom 30 per cent live in extreme poverty, there is considerable, if unstated, fear of famine. And governmental approach, in this context, has been to incentivise rice and wheat cultivation.

While food security is important, perhaps the time has come to rectify the huge distortions in our food basket. In 2014-15, India’s exports of 120 lakh metric tonnes (MT) of rice, earning $7.8 billion, indicated the presence of huge surplus rice stocks far beyond our food security requirements. In the same period, India has imported 46 lakh MT of pulses costing the exchequer $.2.8 billion. The domestic production of pulses is in the range of 180MT, indicating that we are importing nearly 25 per cent of our pulses requirement. For a food crop so vital to the country, this shortfall was always a dangerous proposition, and these past few months of runaway prices have proven why it was unwise to rely upon imports. By January this year, it was known to the government that there would be a 7 to 10 per cent decline in pulses production because of shortfall in the kharif and rabi crop acreage in 2014. India is the largest producer and consumer of pulses and it is grown in few other countries. So the government’s plans to increase imports have failed because there are limitations to scaling up pulses supply through the international market. It has only served to drive up international prices, which is now reflected on our domestic markets too.

Quite ironically, the countries from where we are importing pulses like Canada are now scaling up production to meet the annual Indian demand. This also reveals the limited flexibility of Indian policymakers to quickly increase the cropped area of pulses. The State support for rice and sugarcane — which are water and fertilizer intensive — in terms of irrigation, urea subsidies, free power to operate pumpsets, minimum support prices and procurement, has come at the expense of other crops and vegetables. The case for growing pulses, which requires less water and enables nitrogen fixation in the soil — besides cutting out urea — is a strong one. But for farmers to make the shift in cropping patterns, rationalising the incentives is important, irrespective of the political fallout of this decision. Crops like rice, wheat and sugarcane are being artificially bolstered through huge import duties. Only recently, India overcame an onion shortfall when prices soared to Rs80 per kg, yet another crop which has lost its popularity among farmers. Ironically, retail food inflation for September, at 4.4 per cent, conveys the message that price rise has been tamed. Since 2009, retail food inflation had hovered around the 10 per cent rate, a key reason for the second UPA government’s unpopularity. Unless food price spurts are reined in, the NDA government is in danger of going down the same disastrous road as its predecessor.