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LATEST NEWS UPDATES | Drop in pulses prices despite good rains reveals India's flawed agri policy -Abhishek Waghmare

Drop in pulses prices despite good rains reveals India's flawed agri policy -Abhishek Waghmare

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published Published on Apr 13, 2017   modified Modified on Apr 13, 2017
-IndiaSpend

The drop comes despite a good monsoon in 2016

A good monsoon that led to record sowing and production of pulses–especially tur dal (pigeon pea)–has almost halved their wholesale and retail prices in 2017, a year after dal prices skyrocketed to Rs 200 per kg in some cities at the end of 2015.

In many state-regulated agricultural markets of major tur-producing states such as Maharashtra and Karnataka, prices have fallen to Rs 4,000 per quintal in some markets, 20% below the minimum support price (MSP) of Rs 5,050 per quintal (including a bonus of Rs 425) since December 2016.

A ban on exports, restrictions on stocking by private agencies in a bumper-crop year and absence of futures trading in agricultural commodities have been cited as key reasons for pulses to follow “the usual roller-coaster of high and low prices” in consecutive years, according to this article by Ashok Gulati, Infosys Chair professor for agriculture at Indian Council for Research on International Economic Relations, on March 15, 2017, in The Indian Express.

Markets proved us wrong, and here’s why

After two consecutive drought years, a good monsoon prevailed in most parts of India in 2016, barring some districts of Punjab, Haryana, Kerala and Gujarat, among the major states.

The situation turned after a good monsoon, even as IndiaSpend reported in October 2015 that a perfect storm around tur dal–monsoon failures, insufficient MSP, poor yield per hectare of dal and growing public preference to opt for eggs and meat for proteins–would keep its price high for a long time.

Monsoon in 2016 turned out to be above normal in Maharashtra, productivity increased from about 360 kg/ha to 760 kg/ha and farmers planted dal on record area ever, since the previous year, 2015, fetched them record prices at above Rs 100/kg.

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Business Standard, 12 April, 2017, http://www.business-standard.com/article/economy-policy/drop-in-pulse-prices-despite-good-rains-reveals-india-s-flawed-agri-policy-117041200154_1.html


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