The government is taking a slew of steps to rein in prices of food items, given that even the latest retail food inflation print was higher than projected by the Reserve Bank of India. The new set of measures come at a time when projections of “above-normal” temperature coupled with heat-wave conditions are likely to keep prices of pulses, milk and vegetables elevated.
To boost pulses production and reduce import dependence for these items, the government will be setting up robust procurement system in the eastern regions including eastern Uttar Pradesh, Bihar and Jharkhand.
“Farmers grow pulses in largely rainfed eastern region, through setting up a robust procurement system the farmers will be encouraged to increase several pulses varieties such as tur, urad and gram,” an official told FE.
In anticipation of ‘above normal’ monsoon rains this season, the government is aiming to augment pulses output from these regions by expanding the area under cultivation.
Besides, the government has started direct purchase of onion and tur dal at market rates to build buffer.
The department of consumer affairs also directed traders, importers, millers and stocks of pulses to declare the stocks of these items from April 15. It suspects a substantial quantity of imported pulses are lying in customs warehouses. The states and union territories have also been asked to enforce weekly stock disclosure by all stockholding entities and verify the stocks declared by them.
As a measure of abundant caution, the government has also decided to continue with the concessional import duties on palm, sunflower and soyabean oils til March 31, 2025.
Currently, under the price support system, the pulses are purchased from the farmers for the creation of a buffer and mostly minimum support price (MSP) operations are carried out in the biggest producing states including Rajasthan, Madhya Pradesh, Maharashtra, Karnataka and Gujarat.
Earlier this year, cooperation minister Amit Shah had stated that the country is aiming to achieve self-sufficiency in the pulses production by 2027.
Given the gap between demand and supply, retail pulses inflation has been elevated for the last several months and was reported at 17.71% in March, 2024 while arhar variety of pulses reported a price rise of 33.54%.
To be sure, even as overall retail inflation came in at a 10-moth low of 4.85% in March, prices of cereals, vegetables (mainly potato), milk and meat rose on month, giving credence to the RBI’s view that inflation trajectory would be guided by food prices. The year-on-year inflation in ‘cereals and products’ rose from 7.60% in February to 8.37% in March, despite the beginning of the harvesting of the wheat crop during the month.
The Commission for Agricultural Costs and Prices (CACP) in its report on price policy for rabi crops for marketing season (2024-25) has stated that pulses production is concentrated in a few states and districts in the country and is prone to high fluctuations due to biotic and abiotic stresses.
The commission has recommended that concerted efforts are needed for expanding area under pulses particularly masoor, tur and urad in more districts and in rice-fallows available in eastern and southern states. According to CACP, Maharashtra, Karnataka and Uttar Pradesh account for more than two-third of the total tur production and 25 districts contribute 60% of the output of pulses variety.
The annual production of pulses is estimated in the range of 26-27 million tonne (MT). However, pulses imported is estimated to cross 4.5 million tonne (MT) in FY24, against an import of 2.45 MT in 2022-23. India mostly imports masoor, tur, urad and yellow peas mostly from Australia, Canada, Myanmar, Mozambique, Tanzania, Sudan and Malawi.
In addition, the government is also discussing with Brazil and Argentina to source urad and tur dal for meeting the domestic requirement.
In December, last year the government had extended duty free import of tur, urad and masoor till the end of FY25 for improving domestic supplies.
In the beginning of the month, the government had extended duty-free import of yellow peas used as substitutes for chana till June 30. In December last year, the government allowed duty free import of yellow peas, a substitute of chana, while an import duty of 50% was imposed on pulses variety in 2017 to encourage domestic production.
