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Centre allows pulses import despite overflowing godowns

Farmers have been staging protests as domestic prices are falling on the back of a glut last year and an expected good harvest following a good monsoon

The Union government has allotted quotas for import of pulses and is enforcing an additional import agreement with Mozambique at a time when domestic stocks are at their highest, domestic production is expected to be high and prices are crashing. Farmers and millers are unhappy with the situation, but the government says it is balancing the needs of Indian consumers and commitments to foreign trade partners on the one hand and the interests of Indian farmers on the other.

The final allocations of import quotas — totalling two lakh tonnes of tur or arhar dal, and 1.5 lakh tonnes each of moong and urad — were made at a meeting at the Directorate-General of Foreign Trade (DGFT) on Monday. Those amounts represent a quantitative restriction that was slapped on pulses imports in August 2017 in response to a glut in domestic supply and falling prices, which continues this year. On the back of a good monsoon forecast, the Agriculture Commissioner predicts domestic pulses production of 24 million tonnes in 2018-19, slightly higher than last year’s.

However, the DGFT issued a notice last month exempting pulses imports from Mozambique from the restrictions. 

Fallout of 2016 crisis

In 2016, in the wake of soaring pulse prices and angry consumers, India signed an MoU to double pulses imports — mostly arhar — from the east African nation over a five-year period. This obligates India to buy 1.5 lakh tonnes from Mozambique this year. The government has also explored the possibility of similar long-term agreements with countries such as Kenya.

“There is an MoU … we also don’t want to just stop trade abruptly,” DGFT Alok Chaturvedi told The Hindu when asked about the impact of imports. “This is a long-term agreement.” He pointed out that an inter-ministerial committee headed by the Food Secretary, including the Secretaries of Agriculture, Consumer Affairs and Commerce, made the decision to allow a limited quota of imports which have to be completed by August-end, before Indian harvests, “so that our farmers are not affected”.

However, this does not take into account the fact that last year’s surplus harvests have already resulted in full godowns. 

Sunil Kumar Singh, Additional Managing Director, NAFED, said the government procurement agency alone had 40 lakh tonnes of pulses in its warehouses — a record — apart from stocks still remaining with traders and farmers.

Falling prices

Farmers’ groups have been agitating about falling crop prices all summer. “The import restriction is a classic case of closing the stable door after the horse has bolted,” says Avik Saha, convener of the Jai Kisan Andolan. 

Acreage up

He says the government should have realised that farmers had increased acreage on the back of rising prices, incentivised by a higher minimum support price and technical interventions to ensure higher domestic production. 

“Those statistics pointing to oversupply were completely ignored and instead the government signed long-term deals with other countries, digging its own grave. The seeds of this calamity were planted in 2016, farmers are now harvesting a crop of woe and will continue to harvest it next year.”

This year, for the first time, the government has allowed millers — as opposed to traders — to import pulses. However, Suresh Agrawal, chairman, All India Dal Millers Association, is not a happy man. 

“Prices outside India are higher than domestic rates, so it is not viable to import,” he says, pointing out that while Indian rates for tur were at ₹3,400 a tonne, it would cost at least $410 (more than ₹27,000) to import from Kenya.

Stocks everywhere

“The government has stock, traders have stock, millers have stock, and farmers have stock, so there is a surplus. We don’t understand why the government is insisting on import…we may be able to meet only 40-50% of our quotas.” A senior official at the DGFT insisted that according to the terms of the allocation, import quotas must be met by the end of August.

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