Pulses Promotional StrategiesKey recommendations of

Pulses Expert Group

Yoginder .K. Alagh*Mukesh Khullar

*apologies Have to be in Anand on account of Dr. Kurien’s passing away

Introduction

• Government of India set up an Expert Group on pulses to suggest Short, Medium and Long Term strategies to close the demand supply gap

• Seven issues were identified and Working Groups set up :• Identification of additional area having potential for pulse crops• Seed replacement/multiplication strategy/programs• Identification of Best Agronomic Practices• Review of Prices, Tariff and Trade Policies• Communication Strategies for Farmer Outreach• Medium and Long Term Research and Planning Issues• PPP Business Models

• The group took note of the brainstorming session on Pulses that was conducted in June 2009 in which specific issues and opportunities were culled out for each of the major pulse crops. In turn its interim findings were used by the DAC for its pulse strategies

The Pulse Economy• Yield of pulses has remained low. Number of districts harvesting more than

0.8 or 1 t/ha yield of kharif pulses is small. • Gap between demand and supply has been widening and has necessitated

annual import of pulses of around 3million tons.• By 2024-25 IIPR estimates 25.39 million tons demand.

– Production would have to be nearly doubled from the 2007-08 levels.– “output of pulses should grow at a rate significantly higher than that of cereals

so as to service the expanded demand in these areas” Approach paper 12th Plan

– In fact some econometric estimates of the demand elasticities of pulses range from 1.5 to 2.0. This would mean that with an increase of around 6.5% annual in per capita income demand for pulses would increase around ten percent annually.(Y.K. Alagh, The Future of Indian Agriculture, Indian Economic Journal, April 2011, pp. 40-55:also the same title, NBT,2012)

Demand-Supply-Prices

Unit value of Import vs MSP

Unit value (import) Rs/T MSP Rs/T MSP as % of import value 2009-10 2010-11 2011-12 2009-10 2010-11 2011-12 2009-10 2010-11 2011-12Peas 15663 15033 20265 0 0 0 0 0 0Chickpeas 25102 25049 37094 17600 21000 28000 70 84 75Moong/Urad 44795 53450 41941 27600 31700 44000 62 59 105Lentils 37566 37754 30861 18700 22500 28000 50 60 91Tur (Arhar) 42551 33177 30709 23000 30000 38500 54 90 125Others 38533 48004 36885 - - - Total pulses 28343 27044 27028 - - -

Why Stagnation?• Area Stagnation: The main reason for stagnation in area under pulses has been

differential impact of technology and relative profitability leading to shifting of area under pulses to more remunerative crops. The Expert Group worked out relative price disadvantages for each pulse crop in its major regions. Expansion of irrigation was another factor. Uncontrolled water flows(flooding) common in canal systems is incompatible with large scale area under pulses.

• The second factor influencing area allocation is risk in productivity and farm income. There is a significant decline in instability of yield of paddy and wheat from the onset of Green Revolution. Instability in productivity of gram remained much higher than of wheat: in arhar, much higher than paddy. Pulses grown under unirrigated rainfed conditions ,in marginal lands suffered instability.

• Though India is the largest producer of most of the pulses its productivity levels are generally low. India did not figure in major technological breakthroughs in the world with countries like Canada and others achieving averages of around two tonnes per hectare in pulses productivity. Technology breakthroughs in the difficult regions and adverse farming conditions ( rainfed regions, the ghats and hill regions) was just not there on a large scale

Productivity contrast

0 2 4 6 8 10 12 14

Irrigated rice

Brassica

soybean

common bean

wheat

chickpea

Water use efficiency(kg grain per hectare per mm of water)

Constraints and Opportunities• The agroclimatic, soil, infrastructural constraints are well known and that

part of the report is not repeated.• But on the Opportunities;

– Identification of additional area having potential for pulse crops by utilization of potential area of rice fallow lands 3 to 4 million ha have been identified in specified Districts largely in Eastern India and can yield around 2.5 million tonnes

– About 5 lakh ha area of upland rice, 4.5 lakh ha area of millets and 3 lakh ha area under barley, mutsard and wheat, currently giving low yields can be brought under kharif/rabi pulses.

– About 16.5 lakh ha area vacated by wheat, peas, potato, sugarcane, lentil can be used for raising 60-65 day summer mungbean crop in the States of Uttar Pradesh, Punjab, Haryana, Bihar, Gujarat, and West Bengal where adequate irrigation facilities exist and the menace of blue bull is contained.

– With some difficulty the Group has been able to isolate around 9 million ha in identified Districts where watershed development in recent years gives scope for pushing pulses development.

– Similarly pigeon pea on rice bunds and intercropping in specific agro climatic regimes is identified

Raising Yields• Promotion of Quality seeds• Around 8 million tonnes of certified seeds are needed. The NAS can meet a lot

of these needs. But support from ICRISAT, private public partnerships has also been advocated.

• Good Agronomic Practices• including pest surveillance and dissemination of results

• Mechanization• Not generally noted pulses are grown in different agro climatic regimes and soil

conditions can vary. In many soils mechanisation is essential to raise productivity. Custom hiring Program is suggested.

• Value Chain Development• Private sector should be encouraged to establish’ Dal Mills in rural

areas/districts with large acreage under pulses on the pattern of sugar mills. • Private companies need to be involved in processing, packing and marketing of

pulses. The public sector procurement agencies are severely handicapped for funds and expertise in this area.

The Economics• The report presents a detailed structure of MSP/tariff policy

recommendations to meet the economic incentives needed for what is described as efficiency shifters with calculations from cost of cultivation data to make our farmers competitive by meeting transitional costs. CACP has also recommended this WTO compatible strategy as described in the Alagh Committee Report 2003.

• Procurement centre with adequate storage facilities need to be established at district and block level in major pulse growing zones.

• an urgent need to blend domestic price policy with tariff policy such that domestic price of pulses stabilize and attractive returns to pulse producers are ensured.

• Import duties on pulses need to be calibrated in response to the demand and supply situation. MSP with subsidies without tariffs, subsidises farmers in countries exporting to India

• The Report documents the facts and negative economics of stocking limit orders, trading movement controls, licensing requirements and other controls

On Technology• The Expert Group notes that a detailed plan for achieving experimental yields of two

and a half tonnes per hectare as in some countries like Canada is not available in India and it could not be prepared even though it was requested by it. The existing somewhat rudimentary stage of the art is given in some recent discussions reported . The research establishment is not only to blame since highly negative signals have been given to the scientists working in the field.

• It is obvious that the needs are so high that both for resources and management of details a PPP mode will be needed. The Public sector ICAR system will need to take the strategic initiatives.

• The programs of development outlined above will raise yield to, say, 12 to 15 quintals per hectare. If we get on the drawing board now, it would take four to five years. We need such strategies for many pulse crops, in the PPP mode (GOI, 2010). To meet such needs, both money and mobilization of scarce technical talent are required. We also need great management and organizational abilities to cover the last mile in a long-haul problem.

• DG ICRISAT has recently endorsed the need to plan for yields of above two tonnes per hectare in different agro climatic regimes. The plan will cost hundreds of crores of rupees, if the experience of hybrid paddy is any indication. – For example a highly productive seed chipper machine of Monsanto costs a billion dollars

Some Imperatives• A Central organization working on what are called long-range, marginal

cost principles, which have been advocated for power projects, for example, could work out fair pricing solutions. Anybody doing better than the average efficiency cost estimates, giving a fair rate of return, would keep the profits.

• It is important that the approach of a national regulator suggested in the proposed Seeds Bill is properly designed and implemented by law. Instead, we are going through an extremely destructive regulation of states like Andhra Pradesh, Gujarat and Maharashtra, through State Price Control Acts. " is short-sighted. By cutting down normal profits in the industry after R&D has been done, this will discourage investment in the sector. In April 2011 the Gujarat High Court has struck down the right of the State Government to regulate seed prices.

Newer Business Models

• The models studied involve private-public partnership (PPP) and are listed below:– Rallis India – Tamil Nadu Govt. and partnership for enhancing black gram cultivation in 3

blocks of Pudukkottai district of Tamil Nadu.– Tata Chemicals Ltd.- Punjab state Govt. partnership for promotion of summer moong in

Punjab.– Agriculture Consultancy Management Foundation (ACMF)- Rallis India Ltd. partnership at

Somangalam (Chennai) in Tamil Nadu for promotion of black gram cultivation.

• A public private partnership model involving the agencies and activities listed below is recommended.

• Public Partners:– Public research organizations for development of varieties production of nucleus and

breeder seed.– SAUs/ KVKs for improved package of practices.– Departments of Agriculture for proving policy and administrative support.– water and vegetation) for augmenting pulse production on sustainable basis.

• Pvt partners in next slide

More on PPPs• Private partners: One or more Organizations/ Companies can

participate in the following activities.– Seed production with active involvement for farmers/ farmer groups.– Extension of improved package of production practices to farmers. – Skill upgradation of farmers.– Delivery of inputs and services to farmers.– Technological interventions based on recommendations of SAUs/ICAR institutes.– Crop-insurance and credit delivery.– Procurement of produce from farmer at market rate + incentive.– Promotion of resource relevant farm mechanization – Development of natural resources (land, water and vegetation) for augmenting pulse

production on sustainable basis.

• A National Pulse Development Board of an autonomous character is recommended to coordinate and oversee implementation

Conclusions

• 25 % increase in the crop yields and 5 million ha additional area in next 5 years is possible

• Policies that promote pulses as environment friendly crops and that sustains private sector interest should be encouraged

• Research establishment must come out with clear road map to address known issues to bring pulses at par with other crops

Thank You