A green revolution for lentils: Economic Times Febraury 2, 2010

In the last decade, the production of pulses in the country peaked at 14.91 million tonnes in 1998-99 . Since then, while the country’s population has grown at an average rate of 1.3-1 .5% per annum, our pulses production level has never touched this mark. The result : a higher dependence on imports and substantial rise in domestic prices. In fact, during this period, prices have risen on an average annual basis by 6.3% for chana, 6.1% for tur (or arhar), 6.5% for moong and 8.6% for urad. Given erratic production trends, prices have been declining in one year and rising the next year. This, however, is a problem with almost all farm products as domestic productivity levels are stagnant.
When prices are rising, it is logical that there is an incentive for farmers to produce more of these crops to earn higher incomes. When this happens, in course of time, the deficit in production should disappear. However, this has not happened as there is no sign of crop migration and, consequently, every year, there has been a problem with pulses production.
One theory usually put forward is that the higher minimum support prices (MSP) offered on rice and wheat militates against farmers taking the risk of growing any other crop. Hence, pulses and oilseeds are not given the same attention considering that these MSPs always rise and never fall, which assures the farmers higher incomes. But what is more important is the net income that a farmer can earn from growing any crop as there are variations in the productivity levels as well as cost of cultivation, with inputs such as water having a premium when the region is dependent on monsoon. Therefore, the cost of production has to be juxtaposed with the price received as well as the yield per hectare to compare net incomes across the menu available for farmers.
Two points need to be kept in mind. Tur, moong and urad are kharif crops that compete with rice during the season. Likewise, chana competes with wheat in the rabi season. However, if dual cropping is possible, urad and moong can be grown along with wheat in the rabi season. But will this work? The second point is that the cost of cultivation and prices vary significantly across states because these inequalities mean that farmers in some states are handicapped with low productivity , higher cost of production and lower prices The table below provides a view of the net income to be received on one hectare by cultivating various crops in different states. The cost of production numbers are based on what has been provided by the ministry of agriculture for 2005-06 — the latest official data available — while the prices used are averages for the state for 2008-09 harvest season. It is assumed that the cost has not changed or even if it has, would be proportional. The productivity numbers too are assumed to have not changed.
The table reveals interesting facts. The first is that rice and wheat are the most-remunerative crops and there is no incentive for farmers to move to pulses as the returns are lower. The high MSP being provided with the assurance of procurement has set benchmarks in the market for these commodities . Secondly, urad and moong are the least remunerative crops, so it is not surprising that their share in total pulses production is just 13%.
Thirdly, tur provides better returns than even chana. However, the two do not compete as one is kharif and the other is rabi. Fourth, there is scope for migrating more farmers to chana in Uttar Pradesh where its return is better than wheat (at least for this year). However, it must be mentioned here that, typically, chana has not been a problem for the country and it is the other three that have had to be imported in the past. At times, we have exported chana.
Now, what are the lessons to be drawn from these numbers? The government evidently has to focus on improving the yield of pulses as this would be the only way to enhance production . We need to revisit the Green revolution concept of providing better seeds, fertiliser, irrigation and pesticides to farmers if we have to get out of this trap. Simultaneously, the cost has to be brought down through subsidies across states. This is so because market prices are higher than the MSPs — which makes MSPs irrelevant — and they are not within the purview of the procurement and distribution system of the government.
Further, a critical decision has to be taken on whether to migrate cultivation to pulses from cereals. Also, the inter-state variations in income have to narrow down. For example, in the case of urad, prices have ranged from Rs 1,700 in Chhattisgarh to Rs 3,139 in Tamil Nadu. Moong prices have varied from Rs 2,647 in Andhra Pradesh to Rs 3,673 in Orissa. The difference is not just on account of quality and transportation costs. Quite clearly, spot market reforms are needed to even out prices so that farmers are able to get a better deal. The operation of electronic spot markets would take one closer towards these goals with price knowledge being made available to all.
The takeaway is that the issue of being on the edge in case of pulses is a deep-rooted problem that can’t be resolved by piecemeal measures. Only an intensive campaign can provide a solution.