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Pulses buffer stock plan hits quality wall -Sandip Das
-The Financial Express

The plan to build a buffer stock of pulses, akin to such facilities for rice and wheat, has run into a hurdle after the agriculture ministry insisted that only lentils that meet the Food Safety and Standards Authority of India.

The plan to build a buffer stock of pulses, akin to such facilities for rice and wheat, has run into a hurdle after the agriculture ministry insisted that only lentils that meet the Food Safety and Standards Authority of India’s (FSSAI) quality norms could be procured by the designated agencies. After a directive from the ministry to purchase 35,000 tonnes of pulses this season (July-June)), farmers’ cooperative Nafed began purchases of arhar dal from the farmers in Rajasthan a few weeks ago. However, sources said, of 39 samples picked up by the Nafed team, only two could meet the FSSAI norm of less than 1% foreign matter presence.

The idea of a buffer stock of pulses arose after retail prices of these edibles, the primary source of protein for most Indians, sky-rocketed of late — retail and wholesale inflation in prices of pulses stood at 42% and 53%, respectively, in October.

Apart from Nafed, Food Corporation of India and Small Farmers’ Agribusiness Consortium have been asked to purchase pulses from farmers to create the country’s first buffer stock for these items. A stock of 1 lakh tonnes is being planned.
According to a Nafed official, the FSSAI norms, formulated from purely the consumer’s perspective, are “unrealistic”.
 
“Often farmers bring in produce to the market in the unprocessed form and so most arrivals are bound to fail the FSSAI norms,” the official said. At a recent meeting of the inter-ministerial committee — which is meant to review prices of essential commodities — FCI, which is yet to start procurement of pulses to create the buffer stock, was asked to first collect samples before asking for relaxation on quality of the items.

Meanwhile, farmers have already started to bring urad dal to the mandis across Rajasthan, Madhya Pradesh and Uttar Pradesh, and the arrivals would commence in Andhra Pradesh and Karnataka by January or February. Official said that the delay in fixing quality norms would hit the government’s decision to create a buffer stock as farmers have the option of selling their produce to private parties who could buy urad and arhar at higher than the minimum support price (MSP).While the government has fixed kharif MSP of tur at Rs 4,625 per quintal and arhar at Rs 4,825 a quintal for the 2015-16 session, the price farmers can get from private traders is significantly above this.
 
The spurt in the prices of pulses, which forced the government to launch a massive anti-hoarding drive, was the primary reason for retail food inflation rising to 5.25% year-on-year in October, and wholesale food prices remained in positive territory for the second month even while generally price pressures in the economy are subdued. A Crisil report on Monday said prices of pulses peak every three years due to supply bottlenecks, shift towards high-protein consumption in rural areas and a weaker currency which limits the relief that imported pulses can bring to prices.

Pulses production fell to 17.20 million tonnes in the 2014-15 crop year due to poor rains, against 19.25 million tonnes in the previous year. The country imported more than 4 million tonnes during the last fiscal and traders expect imports to cross 5 million tonnes this fiscal. Despite a higher MSP, the pulses cultivation has not scaled up to meet the growing demand because of inadequate supply of pulses seeds in the country. Worse, pulses are more prone to pest attacks unlike other crops and are mostly grown in rain-fed areas.
 
While nearly all food components are seeing a decline in inflation, pulses inflation has seen the sharpest spike in a decade this October, the Crisil report said, pointing to the WPI-pulse index at its most elevated level since April. The previous price spikes in pulses were in October 2006, December 2009 and in August 2012.