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Pulses production and marketing strategies
A Amarender ReddyPrincipal Scientist
Division of Agricultural EconomicsIndian Agricultural Research Institute, New Delhi
Presentation at IFPRI, New DelhiPulses for Sustainable Agriculture and Human Health
31 May-1 June 2016
Overview of the sector • Production increased from 15 mt until 2009-10 to 19 mt by 2014.• Export ban, zero import duty, stock limits in 2006 (short term measures)• NFSM-pulses, increase in MSP from 2007 onwards, good monsoon from
2010 to 2014 (combination of technology and price with good monsoon) • 2015 and 2016 bad years• About 90% of the pulses growing districts with less than 1 t/ha yield. • Demand growing faster (4-5% per annum) • Imports about 3-5 million tonnes. (world trade only 12 MT)• By 2025 IIPR estimates 25.39 million tons demand. (some other estimate
27 MT)– Production needs to grow atleast 5% per annum” Approach paper 12th Plan – In fact some econometric estimates of the income elasticities of demand of
pulses range from 1.5 to 2.0. This would mean that with an increase of around 6.5% annual in per capita income demand for pulses would increase around ten percent annually.(Y.K. Alagh, The Future of Indian Agriculture, Indian Economic Journal, April 2011, pp. 40-55:also the same title, NBT,2012)
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Trends in production, net imports and availability(MT) and forecast
Net imports Production Total availability
Production and availability of Pulses (Million
Tons)Year Production Net imports
Total availability
2008 14.8 2.0 16.82009 14.6 2.9 17.52010 14.7 3.6 18.32011 18.2 2.6 20.82012 17.2 3.3 20.52013 18.3 3.8 22.12014 19.8 3.3 23.12015 17.2 4.4 21.62016 18.3 5.2 23.52020 21.3 5.8 27.12025 24.0 7.3 31.3
35 180 268579 417
3565
0500
1000150020002500300035004000
1992/94 1999/2001 2013/14
Exports and imports of pulses (1000 tons)
Exports ImportsSudden increase in imports due to zero duty from 2006 onwards and also recent shortfall.Lentil is major export until 2001, but now chickpeas.
Consumer tastes: arhar is preferred even at Rs.70/kg, compared to peas at Rs.14/kg Source: NSSO
10 123 5
13 15
1 2 0 16 8 6 8
57
9 9
87
8 9 15 14 56 6 7
05
101520253035
Rura
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Urb
an
Rura
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Urb
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Rura
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Urb
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Rura
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Urb
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Rura
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Urb
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Rura
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UP Bihar MP Rajastan Punjab Other states All India
Pulses consumption (gm/capita/day)
Arhar Gram Moong Masur Urd Peas Khesari Other
Source: NSSO
32 30 29 27 29 28 27 25
3329 29 27
22 20 19 18
3633
29 29
05
10152025303540
FC ST OBC SC FC ST OBC SC FC OBC ST SC FC SC OBC ST ST FC OBC SC
UP Bihar MP Rajasthan Punjab
Pulses consumption by social group(gm/capita/day)
Pulses UP Bihar MP Rajasthan Punjab India
gram-split 32 52 42 71 85 41besan 54 35 49 66 68 36
gram-whole 15 30 9 9 83 26
arhar 81 38 89 26 11 58
moong 29 31 55 87 89 51
urad 46 3 28 39 50 40peas 39 6 5 1 1 13
kesari 0 6 2 0 0 2
% of households consumed pulses in the reference month
Growth in per capita income at 6% boost demand further.
Demand growth is projected at 27 MT by 2020 and 31 MT by 2025 (IIPR projected 26 MT by 2025)
Need to import 5-7 MT (world trade is only 12 MT)
Arhar, moong, urad: world supply is limited
Source: NSSO
Type of food Frequency of consumption Daily Weekly Occasionally Never Total
Women Pulses or beans 52.7 36.8 9.6 0.9 100Milk or curd 39.8 15.6 33.2 11.4 100Dark green, leafy vegetables 64.2 28.7 6.8 0.3 100Fruits 12.7 27.2 56.6 3.5 100Eggs 3.5 28.8 32.9 34.8 100Fish 6.3 21.9 34.3 37.5 100Chicken or meat 0.9 21.8 42.2 36.1 100Fish or chicken/meat 6.8 28.5 32.0 32.6 100Men Pulses or beans 52.1 38.6 8.4 0.9 100Milk or curd 46.7 20.5 25.8 7.0 100Dark green, leafy vegetables 59.1 34.5 6.0 0.4 100Fruits 13.1 34.4 50.0 2.6 100Eggs 5.2 36.1 36.3 23.3 100Fish 6.2 25.1 38.2 30.5 100Chicken or meat 1.2 27.1 46.0 25.6 100Fish or chicken/meat 6.9 34.1 36.1 23.9 100
Pulses are part of daily consumption basket
Source: NFHS
Crop local private trader
mandi input dealer
government agency
processor others all
arhar 45.2 44.0 9.7 0.1 0.0 1.0 100urad 68.2 25.4 5.8 0.8 0.0 2.4 100moong 69.0 26.4 2.3 0.9 0.0 1.5 100gram 41.9 46.8 10.9 0.4 0.0 0.6 100masur 55.7 21.4 23.2 0.0 0.0 0.0 100Pulses 56.5 33.5 8.9 0.5 0.0 1.2 100
Percent share of farmers reporting sale to different agencies
aware of MSP
aware of procurement agency
sold to procurement agency
% of sale at MSP to total sale
average sale rate received at MSP
arhar kharif 4.6 3.8 1.3 1 35urad 5.7 3.7 1.6 1 38moong-kharif 9.8 7.2 1.8 1 53gram 12.6 9.7 3.9 5 30arhar-rabi 14.2 13.1 4.7 1 47moong-rabi 9.1 3.7 1.9 2 58masur 18.1 15.5 2.0 0 36
% of agricultural households having awareness about MSP
aware of MSP
sold to procurement agency
Procurement agency not available
no local purchase
poor quality of crop
Received better price over MSP
others Total
arhar_k 4.6 1.3 0.2 0.5 0.1 1.5 1.1 3.3urad 5.7 1.6 0.2 1.3 0.1 0.4 2 4.1moong-K 9.8 1.8 0.7 0.6 0 1.6 5 7.9gram 12.6 3.9 0.9 0.7 0.2 1.5 5.5 8.7
Did not sell to procurement agency by reason
Major marketing channels
Item channel-1 channel-2 channel-3 channel-4Price spread (%)farm gate price 54 57 58 52producer market price 56 57 60 53village tradeer selling price 60 56mandi trader selling price 64 66 66 64millers selling price 90 90 90 89wholesaler selling price 94 94 94 93retailer selling price 100 100 100 100Price spread 46 43 42 48consumers price (Rs/q) 6868 6340 6160 7128farmers share in consumers price(%)producer price 54 57 58 52marketing cost 22 21 21 22marketing margins 24 22 21 26consumers price 100 100 100 100
Price spread and farmers share in consumers price
Factors helping higher farmer harvest prices (district level panel data)
Independent variable Coef. t
Minimum Support Price 1.4* 8.5
Road density 8.85* 5.14
Irrigation area (%) 0.82 0.76
Market density 0.05* 1.97
R2 0.83
Number of observations 468
Pulses Exports (1000 tons)
Share in total pulses exports (%)
Imports(1000 tons)
Share in total pulses imports (%)
Peas 0.7 0.3 1351 38Moong/Urad 1.6 0.6 634 18Lentils 0.9 0.3 608 17Chickpeas 264.4 98.5 487 14Pigeonpeas 0.8 0.3 486 14Total 268 100.0 3564.5 100.0
India’s imports and exports (average of 2012-13 and 2013-14)
Is India competitive enough?
Competitiveness of pulses
Indias trade destinations of major pulses for 2013-14
Pulses Top 5 export destinations Top 5 import sourcesPeas Myanmar (84.70%), Pakistan
(7.37%), Nepal (5%), Shri Lanka DSR (2.82%), Malaysia (0.04%)
Canada (70.59%), Russia (11.06%), USA (8.37%), Australia (6.19%), France (1.74%)
Chickpeas
Pakistan (29.93%), Turkey (18.11%), Algeria (17.24%), Sri Lanka (5.34%), U Arab EMTS (4.43%)
Australia (61.43%), Russia (22.77%), Tanzania (7.84%), Myanmar (6.40%), USA (0.47%)
Moong/urad
USA (49.69%), Unspecified (10.21%), Sri Lanka (7%), Canada (7.72%), Kenya (4.29%)
Myanmar (82.83%), Tanzania (4.23%), Kenya (3.55%), Australia (3.05%), Mozambique (1.61%)
Lentils Myanmar (35.16%), USA (25.17%), Kuwait (7.17%), Bhutan (6.55%), Singapore (5.92%)
Canada (79.33%), USA (10.70%), Australia (9.85%), Uzbekistan (0.01%), Turkey (0.01%)
pigeonpeas
Nepal (78.79%), Canada (19.19%), Israel (1.92%), Korea (0.09%)
Myanmar (51.37%), Tanzania (27.44%), Mozambique (14.69%), Malawi (4.53%), Kenya (1.79%)
Domestic supply projections
Estimated demand by 2025
CropNormal production
Scenario-1(BAU)
Scenario-2(High income growth)
Tur 3.72 6.7 7.8gram 9.3 13.0 15.1Urad 1.61 2.9 3.4Moong 1.5 2.7 3.1Others 3.37 6.1 7.0Total 19.5 31.4 36.4
Source: IIPR, Kanpur
Major observations • MSP is not relevant most of the times (deficiency payment)• Time lag- timely intervention (imports/reduce hoarding)• Maintain price band ( trigger procurement and import subsidy) • Buffer stock (10% of consumption)• Procurement centre with adequate storage facilities at block
level in major pulse growing zones.• Removal of controls like export ban, stocking limit to facilitate
national market • Futures and spot markets • Aggregators/producer companies• PPP models
Policy variables• MSP and government procurement not effective-(deficiency payment)• Price monitoring- timely intervention (reduce hoarding)• Maintain price band (procurement and import subsidy) • Buffer stock purchase from open market• Subsidies for micro-irrigation/mobile sprinklers Compatible with WTO.
(infrastructure, buffer stock, food security)• Procurement centre/rizobium inoculations with adequate storage
facilities need to be established at district and block level in major pulse growing zones.
• Removal of controls like export ban, stocking limit to facilitate national market
• Contingency planning • Futures and spot markets • Aggregators/producer companies (Rs.500 crores special purpose vehicle)
Newer Business Models• Pulses development require some innovative institutions like
PPPs– Rallis India – Tamil Nadu Govt. and partnership for enhancing black gram
cultivation in 3 blocks of Pudukkottai district of Tamil Nadu.– Tata Chemicals Ltd.- Punjab state Govt. partnership for promotion of summer
moong in Punjab.– Agriculture Consultancy Management Foundation (ACMF)- Rallis India Ltd.
partnership at Somangalam (Chennai) in Tamil Nadu for promotion of black gram cultivation.
– Seed production with active involvement for producer companies.– Improved storage facilities – Extension to rizobium culture, pulses in waste/fallow lands.– Crop-insurance and credit delivery.– Procurement of produce from farmer at market rate + incentive.– farm mechanization (simultaneous harvesting of rice crop and sowing of
pulse crop)
Conclusions• Atleast 50% of the districts reach 1t/ha yield
level is possible as it happened in chickpea (66%).
• Additional area in next 5 years is possible• Market based policy instruments with better
price monitoring system• Transgenic crops – a long term strategy
Thank you!Thank you!