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No, farmer income will not ‘suffer’ with the new import policy of the govt for pulses: Here is why it is being implemented and what it is

The timely intervention by the Modi government to prevent high inflation in the prices of pulses have already started showing results, as the wholesale prices of tur, moong and urad declined by 10-15% this week

After reports that farmers are worried about dip in their income due to the opening up of the import of pulses, the union government has clarified that the move is not likely to affect the farmers in India. Earlier this month, the Union Commerce Ministry had opened up the import of tur, moong and urad, changing the import policy from ‘restricted’ to ‘free’ category, to check the rising prices on the pulses. Free imports have been allowed till 30 November this year.

After the announcement of the policy change, the prices of the three pulses have started to fall. Following that, The Print published a report yesterday claiming that the farmers are worried about the falling prices and free import, as they think it will affect their income. Due to high demand and low production, the farmers were getting prices above the minimum support price (MSP). The report states that this will change after the import policy change, and due to not getting high prices, farmers may grow less pulses next session which can further aggravate the situation.

Farmer organisations and traders have also expressed concern over the move, saying that it can put a break on India’s efforts of achieving self-sufficiency in pulses, because fall in prices of pulses can encourage farmers to move to more remunerative crops. It may be noted that unlike in the case of food grains where farmers are assured of purchase by govt at MSP, farmers of pulses don’t have that option, and they often have to sale in the private market. Although the present prices are higher than MSP, they fear fall in prices will change that and they will have to suffer losses.

Bhartiya Kisan Sangh (BKS), the farmer’s wing of the Rashtriya Swayam Sewak Sangh (RSS), had also demanded that the govt should revert the decision to allow free import of the pulses. They said that it has sent a wrong message to the farming community ahead of the Kharif season. BKS BKS secretary general Badri Narayan Choudhary said that the farmers may think that they don’t need to sow the pulses this Kharif season as they may not get good prices due to the new session.

Govt assures farmer income will not be impacted

Following the concerns raised by the farming community, the ministry has clarified that the policy change was needed to stop the inflation in the prices of the three pulses, and it is not going to affect the farmers. Sources in the ministry said that the fact that the prices were above MSP shows that there is a shortfall in production. “At current level of annual domestic production and demand, imports are inevitable to meet the demand-supply gap,” an official in the ministry said.

The ministry says that for the last two years, pulses have been a consistent contributor to inflation. Availability of pulses at affordable price is crucial not only from the viewpoint of inflation and monetary policy, but also for food security, maintaining and improving nutrition intake and health, especially in children, the ministry source added.

Rising prices of the pulses prompted the govt to allow import

In view of this situation, import of tur, moong and urad have been allowed freely. The ministry says that even with this free import, it can’t impact the local production because the scale of production does not match. India is both the largest producer and consumer of pulses, and the production of popular pulses such as tur and urad overseas are can’t be compared with India’s production and consumption.

At present, the available international stock of tur is around 7 lakh metric tonnes and the same for urad is about 5 LMT, much less compared to Indian production. For the year 2021, India’s tur production is estimated at 38.8 LMT, while the same for urad is 24.5 LMT. The import of both the pulses were estimated at 4.43 LMT and 3.35 LMT. While Moong production was 26.2 LMT, its import was 0.82 LMT.

Annual Production and Import of Pulses

India’s domestic production is much more than what is available in the international market for import. Therefore, the imports will not impact the farmers much, it will only help in check the rising prices of the pulses.

According to govt sources, the current stock of the pulses in the country will last only for around three months, which will mean that the prices will soar soon if steps are not taken. It is notable that despite the large production, India needs to import every kind pulse except chana, which means govt does not have the flexibility of releasing the product from stock to prevent price rise, like it does with food grains.

Govt estimates that the kharif harvest of tur, urad and moong will start arriving in the market from December, as the sowing is also expected to get delayed due to Covid-19. Therefore, the govt has allowed free import of the three pulses upto November 30.

The govt further assures that the procurement of pulses by govt agencies in MSP will continue.

Inflation in pulses stop after policy change

The timely intervention by the Modi government to prevent high inflation in the prices of pulses have already started showing results, as the wholesale prices of tur, moong and urad declined by 10-15% this week. Along with allowing import, the union govt has also asked the states to monitor the stock and prices of pulses under Essential Commodities Act, to control any sudden spike in prices.

 

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Staff reporter at OpIndia

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