International Journal of Research in Economics and Social ...euroasiapub.org/wp-content/uploads/2017/07/29ESSJune-5099-1.pdfSwaha Shome Faculty Economics ICFAI Business School Introduction:

International Journal of Research in Economics and Social Sciences (IJRESS) Available online at: http://euroasiapub.org

Vol. 7 Issue 6, June- 2017, pp. 269~279

ISSN(o): 2249-7382 | Impact Factor: 6.939 | Thomson Reuters Researcher ID: L-5236-2015

International Journal of Research in Economics & Social Sciences

Email:- [email protected], http://www.euroasiapub.org

(An open access scholarly, peer-reviewed, interdisciplinary, monthly, and fully refereed journals.)

269

Pulses- India Needs a “Rainbow Revolution”

Swaha Shome

Faculty (Economics) ICFAI Business School

Introduction:

The Economic Survey- 2016-17 has urged the necessity of increasing the production of

pulses in India. The survey has criticized the agricultural policy in India as being cereal centric.

Pulses are considered a principal source of vegetarian protein in India. Pulses contain 25% protein,

which is twice the protein in wheat and thrice the amount in rice. The protein content in pulses is

also easily digestible as compared to that in eggs meat and poultry. Thus, pulses are an important

part of the Indian diet and hence any increase in prices will affect the consumer’s welfare. Pulses

comprise about 11% of the total intake of protein in India. Following the Green Revolution in

1950s, the cultivation and production of rice and wheat increased manifold. High Yielding

Varieties of seeds, ample irrigation and fertilizers added to the increasing yield. Within a few

decades India became self- sufficient in rice and wheat. Yet, Pulses seemed to have escaped this

phenomenon and there is an urgent need for a “rainbow revolution” to ensure the protein intake

of the masses of the country. This paper seeks to examine the main reasons behind a shortage of

pulses in India and thereby confirm the need for the initiatives taken by the Government.

Background:

The main pulses grown in India are Gram (Chickpeas), Arhar (tur) Moong Dal,

Urad, Lentils (Masoor) and Peas (Matar). There are other sub-varieties as well. Pulses are grown

all over the country, other than those areas with very heavy rains. Major areas under pulses are in

the States of Madhya Pradesh (24%), Maharashtra (14%), Rajasthan (6%), Uttar Pradesh (16%),

Karnataka (7%), Andhra Pradesh (10%), Chhattisgarh (3.8%), Bihar (2.6%) and Tamil Nadu

(2.9%).Pulses are predominately rain-fed crops and production is sharply affected by drought.

However, since pulses are leguminous plants and aids in nitrogen fixation, cultivation of pulses

have positive externalities as its cultivation alternately with other crops helps in preserving soil

quality. The two most important pulses grown in India are Gram and Tur. Gram is being grown in

about two-fifths of the total area under all the pulses. Gram is generally a Rabi crop, and sometimes

it is sown mixed with wheat. Thus it is an alternate crop in the central and northern India. The

other pulses like Tur, Urad and Moong are grown as Kharif crops. In northern India, Khesari and

Masoor are raised as Rabi crops. Gram is mainly produced in Madhya Pradesh, Haryana, Uttar

Pradesh and Rajasthan. Tur is is often produced on the low banks dividing the rice fields. Madhya

Pradesh, UP and Maharashtra are the main producers. Red Lentils or Masoor is another Kharif

crop having high nutritional value and relatively cheaper. The other variety is Moong which is

highly consumed in eastern India. The Rabi production of pulses is twice that of the Kharif

International Journal of Research in Economics and Social Sciences (IJRESS) Vol. 7 Issue 6, June- 2017, ISSN(o): 2249-7382 | Impact Factor: 6.939



(An open access scholarly, peer-reviewed, interdisciplinary, monthly, and fully refereed journal)

270

production.

India is the largest producer as well as the consumer of pulses.

According to FAO, the country accounts for 22% of the world pulse production. However, the

availability of pulses has persistently been lower than demand thus requiring significant imports.

The main reason for the shortage is that the production of pulses has grown by less than one

percent in the past forty years. This figure being almost half the growth rate of India’s population

has led to a fall in the per capita availability of pulses. According to several rounds of NSSO, per

capita availability of pulses has declined from 60 gms per day in 1950s to 40 gms per day in 1980

and around 35 gms per day in 2000. The past few years however has seen an improvement with

the availability increasing to 50 gms per day mostly due to higher production. India achieved a

record production of 18.1 Million Tonnes in 2010-11, with a record output in chickpeas, moong

and urad. This improvement in production has been due to the increased efforts taken by the

Government through the National Food Security Mission .There has also been an increase in

imports of dry peas from Canada and Australia.

According to IIPR (2011), in order to achieve self sufficiency, pulse requirement in the country is

estimated at 32 MT in 2030, which requires an annual growth rate of 4.2%. Studies by

Kumar(1998) and Mittal (2006) growth of pulses should be in the range of 6%.

Acreage, Production and Yield of Pulses in India:

Gross cultivated area in India increased by more than 30 million hectares during last 50

years since the start of green revolution. However, pulses hardly showed any expansion in acreage.

The main reason for stagnant area under pulses has been the relative profitability of competing

crops as well as differential use of technology. After the green revolution, High Yielding Varieties

(HYV) of wheat pushed out gram cultivation in the Rabi season. In comparison with the other main

Kharif and Rabi crops, pulses show very poor performance. The yield and production of pulses

have largely remained stagnant since the 1980S. Between 1966 to 2009, the yield of pulses

increased only by 12.2 % as compared to 162.6% for wheat. The following graphs show a

comparison between pulses, wheat and rice in terms of area under cultivation, production and

yield.





271

Fig 1: Area under Cultivation (million hectares) of Rice, Wheat and Pulses

(1975-76 to 2013-2014)

Source: Agricultural statistics at a glance

Fig2: Production (million tonnes) of rice, wheat and pulses.

(1975-76to2013-2014)


Fig3: Yield (kg/ha) for rice, wheat and pulses.

(1975-76 – 2013-14)


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YIELD

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To support the graphs, the following table shows the stagnation in area, production and

yield of all pulses in India in the last three decades.

Table1: Area Production and Yield of Total Pulses in India

Year Area (million hectares) Production(million tonnes) Yield (kg./ hectares)

1980-81 22.46 10.63 473

1990-91 24.66 14.26 578

2000-2001 20.35 11.08 544

2010-11 26.40 18.24 691

2011-12 24.46 17.09 699

2012-13 23.47 18.34 781

Source : Computed from RBI Handbook of Statistics

As a result of the widening difference between yield of pulses and that of rice and wheat, the

profitability of pulses declined inspite of prices increasing due to the deficit in supply.

Minimum Support Prices and its Economic Impact:

The major incentive to increase acreage, production and yield of any crop should be the

output prices. The Government of India does provide price support to the farmers through the

support prices referred to as Minimum Support Prices (MSP). The Government announces MSP

for 24 crops but procurement of the same is largely limited to rice wheat and some cotton. There

has been steep increase in MSP of pulses as seen in the following table and graph which has not

increased either the acreage or yield. In other words, increasing the MSP has not been perceived

as an incentive to increase acreage under cultivation.

Table 2: Minimum Support Prices (Rs per qtl) for the different pulses: (2011-2014)

Pulse 2004

-05

2005-

06

2006-

07

2007-

08

2009

-10

2009

-10

2010

-11

2011

-12

2012-

13

2013-

14

2014

-15

2015

-16

Tur 1390 1400 1410 1550 2000 2300 3500 3700 3850 4300 4350 4625

Gram 1425 1435 1445 1600 1600 1760 2100 2800 3000 3100 3175 3500

Moong 1410 1520 1520 1700 2520 2760 3670 4000 4400 4500 4600 4850

Urad 1410 1520 1520 1700 2520 2520 3400 3800 4300 4300 4350 4625

Lentil 1525 1535 1545 1700 1700 1870 2250 2800 2900 2950 3075 3400

Source: Handbook of Statistics: RBI

*For 2010-11 and 2011-12, MSP includes Rs 500 for the harvesting season

It is seen that the MSP of kharif pulses are more than that of the Rabi Pulses. The cost of

production of the rabi pulses is less than that of the kharif pulses. If one looks at state level data,





273

cost of production in Bihar and Madhya Pradesh is lower than in other states. Andhra also has a

lower cost of production than the MSP. This means that acreage in these states can be increased

more profitably. In fact introduction of chick peas in the black soils of Andhra can be taken as a

case study on how to increase pulse production in the country. We can consider the response to

MSP in terms of acreage for the two major pulses, gram and tur.

Fig 4: Acreage, yield and MSP for gram

(1985-86 to 2013-14)


Fig 5: Acreage, yield and MSP for Tur

(1985-86 to 2013-14)


It is evident in the above graphs that despite a sharp increase in the MSP of both gram and

tur, neither the acreage nor the yield has increased significantly. If we take an average acreage of

all pulses in India and take the average minimum support prices for pulses as whole, the same

conclusion can be made by estimating a simple OLS regression with Acreage as a dependent

0

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aucgram mspgram yldgram

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auctur msptur yldlagtur





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variable and MSP of pulses as an independent variable. The period considered is 1975-76 to 2010-

11. Since Acreage under pulses is stationary at level but MSP of pulses is stationary after first

differencing, we look at the following equation,

AUCPt = C + a.change in MSPP+ ei…………………………………….. (1)

Where AUCPt= Area under cultivation of Pulses in period t

C =constant

ei = error term

Table 3: Regression Results:

COEFFICIENT T VALUE R2 F

Change in MSPP 0.04** 2.11 0.2 0.04

** significant at 5%

The regression results show that MSP increase has a positive significant but a very small impact

on area under cultivation. Hence the increase in MSP is not a sufficient tool to increase pulse

acreage.We can thus conclude that the supply response of pulses to MSP have been highly inelastic.

The main reason why pulses acreage and production have not picked up in India is that

there is no assurance of a support price. In contrast, the assurance of open ended procurement of

rice and wheat at assured prices encourages the farmers to grow rice and wheat in most of the

available irrigated land, thus leaving the un-irrigated land for pulses. This makes the crop

dependent on variation of rainfall. Every episode of drought hits the production of pulses and

thereby yield falls. In fact the yield in India is lower than the major pulse producing countries. The

main reason for this is dependence on rains, less application of fertilizers and pesticides as well as

less availability of high yielding seeds. The following graph shows the comparison of the

percentage area irrigated for rice, wheat and pulses.

Figure 6: Area under irrigation for Wheat, Rice and Pulses(%)


To check the impact of MSPP and irrigation on yield in the same period, the following regression

is estimated.

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RICE WHEAT PULSES





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YLDPt = C+ a.change in MSPP + PERCENTIRRGNt + ei. …………………………………..(2)

Where YLDPt : Yield of Pulses. Here again YLDP is stationary at level

PERCENTIRRGNt: Percentage of area under pulses which is irrigated. This variable is also

stationary at level.

Table 4: Regression Results

COEFFICIENT T VALUE R2 F

Change in MSPP 0.002** 2.22

Percentirrgn 13.25** 504 0.62 >0.000

** significant at 5% and below

This shows that if more irrigated area was put under pulses cultivation, the yield would

have increased significantly. However, as shown above , most of the irrigated land is under rice and

wheat cultivation. In terms of fertilizer usage, pulses have a very small share of fertilizer

consumption as compared to wheat and rice. The following figure shows the limited consumption

by pulses as compared to other crops. Fertilizers are expensive and their usage can be justified

when the farmer is able to realize his costs. Once again the issue of assured price support can be

stated as the reason behind poor use of fertilizers for pulses.

Fig 7:Crop Wise consumption of fertilizers (2010-11)


The use of pesticides in pulses is also much below optimum leading to loss. Pulse crops

are highly vulnerable to pests during cultivation as well as after harvesting. According to IIPR, crop

losses of around 15-20% are seen in post harvest output. Infact availability of pulses can be greatly

increased by investments in crop protection which will require suitable research programmes.





276

The yield of pulses is not supported by high yielding seeds. According to the seeds division of the

agriculture ministry, in 2010-11, 101 lakh quintals of seeds were required .Against that only 20.83

lakh quintals of certified seeds were supplied which has a severe impact on yield. Thus more effort

is required by the Government to reduce the wastage through more scientific storage and

warehousing facilities.

As a result of these suboptimal levels of inputs, the yield of pulses have remained largely

stagnant. In order to increase yield of pulses, it is important to incentivize the farmer to increase

irrigation, fertilizer and pesticides rather than only increase the MSP. Assurance of a MSP will have

strong incentivizing effect in increasing the inputs. There is also a greater role to be played by

organizations like the Indian Agricultural Research Institute (IARI) and the International Crops

Research Institute for Semi Arid Tropics (ICRISAT), to provide the necessary technological support.

The major R&D thrust should be on solving issues like low yield, huge post harvest losses,

inadequate technology adoption amongst others.

Import of Pulses:

The demand for pulses has consistently been higher than the domestic production thus

resulting in imports. Pulse output in 2015-16 crop year (July-June) is expected to be 17.33 million

tonnes as against the demand of 22-23 million tonnes. Myanmar, Tanzania, Mozambique, Canada,

USA and Australia are the major exporters of pulses to India. The following table shows the

imports of pulses by India in the past few years. The domestic price of pulses therefore get affected

by international prices and very often the MSP does not take into account the same.

Table 5: India’s Import Dependence

The following table shows the import and export of pulses by India. (IN LAKH TONNES)

Year Import Export

2006-07 25.04 2.64

2007-08 29.45 1.82

2008-09 25.8 1.45

2009-10 37.64 1.29

2010-11 27.8 2.06

2011-12 34.96 1.75

2012-13 16.74(apr-sept) 0.66(apr-sept)

www.ipga.co.in/pulses-trade-import -export

Prices of Pulses:

So far we have concentrated on the supply side issues of pulses. The increasing demand

for pulses which is not matched by larger production have an upward impact on prices The whole

http://www.ipga.co.in/pulses-trade





277

sale price index of pulses has increased much more than paddy and rice thus affecting consumer

welfare. The following graph shows the comparison with rice and wheat.

Fig 8: Comparative WPI of rice, wheat and Pulses:

In spite of such an increase, the gross value of output from pulses have remained far below rice

and wheat.

Table 6: Gross Value of Output from Rice wheat and pulses: (at 2004-05 prices) in Rs crores

Item 2004-

05

2005-

06

2006-

07

2007-

08

2008-

09

2009-

10

2010-

11

2011-

12

2012-

13

Rice 73162 78869 79936 82930 85672 78091 82539 90606 86971

Wheat 47788 47218 53948 55166 56231 55291 59448 64857 62955

Pulses 20246 20627 21406 22839 22307 22137 26794 26165 27955

Procurement of Pulses:

The three main agencies for procurement of pulses are Food Corporation of India (FCI),

Small Farmers’ Agribusiness Consortium ( SFAC) and National Agricultural Cooperative

Marketing Federation of India Ltd.(NAFED) .In case of wheat and rice, the FCI procures the grains

directly from the farmers , thereby ensuring that the benefit of MSP is passed on to the farmers.

However, in case of pulses, the middle men insist that the payment to farmers be made through

them. In most years, the prices the farmers get from the private traders is above the MSP. The

Government has fixed kharif MSP for tur at R4,625 per quintal for the 2015-16 session, the price

farmers can get from private traders is significantly above this.The following table shows the price

of Tur in the months July- December 2015.

0.00

50.00

100.00

150.00

200.00

250.00

300.00

WPI of Pulses , Wheat and Rice (Base 2004-05)

pulses rice wheat





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Table 7 : Retail Prices of Tur – July to December 2015. (In Rs per kg)

Item July august September October November December

Tur 113 114 132 158 166 167

Hence it becomes difficult for the procuring agencies to create a buffer stock which is the only way

the spikes in price can be avoided.

Hence it is imperative that strong procurement machinery be set up for prices such that

the farmers have an incentive to grow pulses. The budget speech 2016 points towards that

direction. The Government has suggested Rs 500 crores under National Food Security Mission.

There is also a plan of creating buffer stocks of pulses through procurement at MSP as well as the

creation of a Stability Fund to stabilize market prices. This fund gives a corpus of Rs 900 crores to

support market interventions. In December 2015, the Cabinet Committee on Economic Affairs

(CCEA) decided on a creation of a buffer stock of pulses. This aims to procure 50,000 tonnes of

kharif crops and one lakh tonne of Rabi crops. Procurement will be done at market prices by the

FCI, NAFED, SFAC and any other approved agency. Most of the procurement is expected from

Madhya Pradesh, Chhattisgarh and Rajasthan.

These market prices may be above the MSP and will be financed through the Price

stabilization Fund. If the prices go below the MSP, procurement will take place at the MSP. This

action is expected to reduce price fluctuations in the pulses market and hence reduce food

inflation. If the MSP become effective it will act as an incentive to produce more pulses and thus

reduce dependence on imports.. FCI has already started the procurement of pulses at a budget of

Rs 240 crores. This will goa long way in creating a sufficient stock of pulses so as to stabilize

domestic prices. The import of pulses is also being taken to create buffer stocks of pulses.

Also, trade policy works independently of MSP policy, and hence, imports of pulses often

come at prices much below their MSP. Hence instead of raising MSP, it is important to implement

them.

Conclusion:

It is evident that the agricultural policy in India till now have not paid much attention to

the long run sustainability of pulse production in India. Till very recently, agricultural strategy

albeit with an intention of ensuring grain sufficiency continued to favour only rice and wheat. This

only led to burgeoning stocks and increasing subsidy bills. Simultaneously such a biased policy

pushed out other crops like pulses, thereby having a strong impact on soil quality, groundwater

usage and the domestic insufficiency. The Government has to move beyond increasing MSP. Pulses

need to receive its due share of attention .This will require measures for ensuring adequate

procurement, creating a buffer stock and give attention to research and technological innovations.





279

With a better seed – fertilizer – irrigation support higher yields will be achieved and greater area

devoted to pulses. There is also a need to be region specific in the long term policy on pulses. If

green revolution made India self-sufficient in food grains and the white revolution made the

country the largest producer of milk, it won’t be long before suitable policies can make the

nutrition deficiency in India get addressed by the rainbow revolution, where pulses play an

important part.

Bibliography:

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healthy food consumption:Public distribution of pulses in India

http://www.ifpri.org/publication/effectiveness-food-subsidies-raising-healthy-food-

consumption-public-distribution-pulses

Incentivising Pulses Production through MSP ... - Ministry of Finance

www.finmin.nic.in/sites/default/files/Pulses_report_16th_sep_2016.pdf

Incentivising Pulses Production through Minimum Support Price ... - PRS

http://www.prsindia.org/parliamenttrack/report-summaries/incentivising-pulses-

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Joshi P.K. et.al (2016), IFPRI Discussion Paper: “Making pulses affordable again: Policy

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Singh RP (2012) Status Paper On Pulses

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climate-friendly-agriculture/

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https://nfsm.gov.in/StatusPaper/PulsesStatus2016.pdf

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International Journal of Research in Economics and Social ...euroasiapub.org/wp-content/uploads/2017/07/29ESSJune-5099-1.pdfSwaha Shome Faculty Economics ICFAI Business School Introduction: