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Why pulses rates skyrocketed

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Drought alone is not the cause for the rising prices of pulses. Mismanagement of the supply chain and lack of foresight have also contributed to put dal beyond the reach of the common man.

Pulses, the common man’s food, have gone beyond the reach of millions with the government failing to rein in the crisis extending across the country since March, 2015. Lethargy and mismanagement by the State government, problems of a mismatch in demand-supply, and rigidity in the supply chain, owing to a narrow stock limit, were further compounded by the extended two-year drought in the State.

Maharashtra, somehow, failed to put a finger on the pulses crisis. Not only did the Bharatiya Janata Party (BJP)-headed government in the State miss a few tricks, it moved slowly and clumsily in intervening to stem the prices during the peak crisis period between March and October, 2015.

The government’s mismanagement even spurred action by the Prime Minister’s Office which had to intervene to correct the misinterpretation of central orders. On October 28, 2015, Joint Secretary to Prime Minister, Anurag Jain, wrote to Chief Minister Devendra Fadnavis: “Stock limit shall apply to any stock held by dealers after the first sale by importer.”

The limit was for wholesale traders to maintain less than 5,000 quintals of pulse stock in Mumbai; 3,500 quintals in other areas, and 1/9th of last three years’ crushing dal stocks with millers.

Meanwhile, between April 10 last year and April 11 this year, the prices jumped by 60.35% for tur, 83.55% for urad, and 43.57% for gram.

The State has so far shown little urgency in lifting the un-milled pulses from the Centre’s buffer stock (at Rs. 66 per kg, to be sold in the retail market at Rs. 120 per kg). With a prospective shortfall of 13,00,000 metric tonnes this year, the State failed to lift two instalments from the buffer stock totalling 17,000 tonnes. This stock is now gathering dust at Food Corporation of India (FCI) godowns at Latur, Akola, Jalgaon, Udgir and Yavatmal. The mismanagement of the crisis did not end with this. In October 2015, the government misinterpreted central directives and lifted the ‘stock limit’ on pulses at 4 p.m. on October 19. This was followed by midnight raids on consignments at ports and seizure of nearly 74,846 tonnes of pulses from alleged hoarders.

Traders, importers and millers claim the State’s reaction delivered a ‘disastrous’ signal to the market, which reacted with a further price hike. “All the government did was, paint the entire trading community as hoarders and black marketers. The government must facilitate trade instead of trying to micro regulate it during a crisis such as this,” said Prem Kogta, president of the Jalgaon Dal Mill Owners’ Association.

Not a single action was taken against the big corporate retail chains found selling pulses at higher rates, while importers and traders working on wholesale prices — that remained lower than retail prices all through 2015 — faced the brunt. “Chains like Big Bazaar, Reliance Fresh did not face any music at all while the importers and miller were hounded,” said Navin Bhai, former secretary of Grain Rice and Wholesale Merchants’ Association (Mumbai).

The seized stock was later returned to the same traders who had faced government action under the Essential Commodities Act, and the stock limit was scalede back until September 30, 2016. Unable to control the crisis, the State appointed a Price Monitoring Committee on December 28 last year to regulate the rates of 27 essential commodities, including onion and potato. The committee suggested introduction of a Price Control Act to ensure traders prepare a rate chart, and sell pulses at fixed prices. The punishment for violation was proposed as jail term of three months or one year.

The Bill is currently pending approval by President Pranab Mukherjee. The trigger for the draft Bill was hoarding and profiteering by traders. “It cannot be denied that traders are creating artificial shortages to jack up prices, there is an urgent need for a Bill to control prices, the Act will allow traders to appeal to Divisional Commissioners,” a Cabinet note of April, 2016 reads.

Historical mismatch

In 1956, India was producing 120 lakh tonnes of pulses for a population of 42 crore.In 2015-2016, production of pulses is estimated at 17.06 million tonnes, while the demand for it stands at 23.5 million tonnes.

“Our population kept increasing but the pulse production remained static. The per capita consumption dropped to 40 gm per person from 68 gm in the 1950s, the yield too dipped to about eight quintal an acre from 12 quintal. Slowly, the farmers abandoned pulses because its yield was three times less than wheat, and when the government’s minimum support price too supported wheat, that was the end of pulse production in India. The successive governments did not make any long term plans. It (crisis) has now exploded,” explained Sunil Baltewa, executive member of the New Delhi Grind Merchants’ Association.

Buffer stock

The fears of buffer stock going waste were raised at a meeting of the State price monitoring committee on pulses on April 21 this year. Members of the committee revealed that the government is yet to chalk out a plan to transport 7,367.5 tonnes of tur, urad and chana to the milling units due to disagreement of prices. “The government has no clue where the milling and polishing of the naked grain is going to be carried out or what will be the recovery percentage millers are going to charge. All this, while a huge stock is lying at the FCI godowns. This government is just lethargic,” said Nitin Kalantari, manufacturer of Pistol Dal, a popular brand in Marathwada.

A senior FCI official said they had started procuring pulses since January — tur at Rs 8,900 per quintal, urad at Rs. 4,800 per quintal and chana at Rs. 10,800 per quintal. “But we do not yet have information on what the State wants to do with this stock, whether they want to distribute it through PDS or auction it directly into the market. We do not have any experience of distribution or transportation,” said G.S. Rajasekhar, general manager, FCI (Maharashtra).

Consumer, the fall guy

The ultimate impact of the pulse crisis is being felt by the average consumer, who is forced to cut down on his daily consumption. On an average, a single family in Maharashtra consumes 200 gm of tur daily, which goes up during the festive season.

Low-income homes are either cutting down on consumption or trying to substitute tur with moong which has more amount of nutrient value. “Earlier, when tur was around Rs. 100/Rs. 120, I used to buy two to three kg per month for my family, but now prices have increased to about Rs. 200/ Rs. 220. We have cut our consumption to 1-1.5 kg. The prices of vegetables are also high, it is becoming hard to manage kitchen,” said Balkrishna D. Kadam, 53, a security guard who lives with his family of five in a chawl at Grant Road. Mr. Kadam’s monthly income is Rs. 8,000.

The retail prices of tur and moong are touching Rs. 160 and Rs. 175 per kg. The all-India retail prices have hovered around Rs. 200 through June, only to settle at Rs. 198 per kg on June 21. “I only cook dal once a week now. I now cook more dishes using potatoes, since even other vegetables are getting costly. I can’t disturb the family budget, as it will now cost me Rs. 800 to Rs. 820 for the same consumption. I don’t want to compromise with my children’s education or medical requirement of the family,” said Ms. Kanchan Jalandariya, 42, a Grant Road resident.

(With inputs from Sourabh Jain, Aditya Jain)

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Printable version | Jan 28, 2020 8:19:42 PM | https://www.thehindu.com/news/cities/mumbai/news/Why-pulses-rates-skyrocketed/article14406461.ece

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