Economic Survey explains: Why prices of pulses are soaring

Moneycontrol BureauThe Macro Economic Survey 2016-17 tabled in Parliament on Friday brought to light the various strengths and weaknesses of the Indian economy, including that of the agragarian sector, which has witnessed some challenges. For agriculture, the sector that supports almost half the country’s workforce, climatic constraints have been the biggest drag, bowing the rural economy down adversely. To add to the pain, pulses have attracted unpopular headlines on account of their soaring prices.The macro picture Tagging low productivity as the central challenge of Indian agriculture, particularly pulses, the survey highlights how the main food grains—wheat and rice—occupy most of India's fertile and irrigated lands. Not just this, "they (rice and wheat) use a large part of the resources that the government channels to agriculture, whether water, fertiliser, power, credit or procurement under the minimum support price (MSP) program."India, which also is the major producer and consumer of pulses, has low pulse yields and to meet its domestic demand, imports alone cannot be relied on. To counter the issue, the government will have to incentivise production of pulses and could make rapid gains in productivity through convergence within the country.Where are crops grown? A double blow for pulsesAccording to data from the "Situation of Agricultural Households Survey, 2013" by the National Sample Survey Organisation (NSSO), bulk of pulse is grown on unirrigated land across the states. While a large share of output in wheat, rice and sugarcane – in Punjab, Haryana and UP – is from irrigated land, majority of the national pulse output comes from un-irrigated land. Moreover, there is a difference in agriculture income between the more and less productive states.What does this mean for farm incomes?The impact of low agribusiness yields is significantly high and widens from unstable farmer earnings to acres of land locked low-productivity."The average annual income of the median farmer net of production costs from cultivation is less than Rs 20,000 in 17 states, according to National Statistical Service (NSS) data." Hence, to match the growing demand for pulses and look into the farmers' distress, the government will need leaps of pulse production on irrigated land. However, absence of policies concerning pulse production amid pool of measures catering cereals and sugarcane will be a hitch.