<div><em><strong>Sutanu Guru</strong> looks at the underlying causes for the alarming price of pulses</em></div><div> </div><div>Many Bollywood songs refer to the act of eating "dal-roti" as available ritual for poor people in India. But with dal becoming as expensive, if not more, as fish and chicken, the myth about dal being part of a poor family's diet has been shattered irrevocably. That this unpalatable fact has touched a raw nerve is evident from ground reports coming out of election bound Bihar. The insanely high prices of dal have given a great opportunity to opponents of Prime Minister Narendra Modi to hammer him with. And they seem to be succeeding to some extent. But beyond the name calling, the blame games and the political posturing, what has caused this unprecedented "dal" crisis? The author can identify five reasons for this.</div><div> </div><div>The first reason is a decline in output. Thanks to successive poor monsoons, the output of pulses in declined from 19.25 tons in 2013-14 to 17.20 tons in 2014-15. A poor monsoon in the current year threatens to act as a double whammy. The fact is that less than 10% of pulses are grown in farms that are irrigated. The crop is almost entirely dependent on monsoons. This is the reason why per hectare output of pulses in India is a measly 750 kg compared to the global average of more than 2000 kg.</div><div> </div><div>The second reason is limited output across the world. The total global output of pulses was about 70 million tons in 2014-15. India accounted for more than 25% of the global output. So when there is a crop failure in India as it happened in 2014-15, there is not much scope to import vast quantities to make up for the domestic shortfall. In any case, India imported 4.6 million tons of pulses in 2014-15. Thanks to increased demand from India, the price of arhar dal in global markets has zoomed from $ 800 a ton in 2014 to well above $ 2000 a ton in 2015. In short, there is hardly any maneuvering room left for the Modi regime.</div><div> </div><div>The third reason is structural and long term. India is justifiably proud of the Green Revolution that has made the country a net exporter of food grains. The last time India went with a begging bowl around the world because of food grains shortage was in 1965-66. But the Green Revolution has completely bypassed pulses. Even a cursory glance at data reveals shocking facts. The total pulses output in 1970-71 in India was 11.8 million tons. After two decades of Green Revolution, the output had gone up to 14.3 million tons. Shockingly, the total output in 2000-01 was below the output achieved 30 years ago at 11 million tons. During the same period, the wheat output had gone up five times and that of potato by about 10 times. It is only in the last decade and half that one has seen a sustained, if modest rise in pulses output. But one bad monsoon and the gains vanish. </div><div> </div><div>The fourth reason is perhaps the root cause behind the third reason. Since the 1970s, planners and policy makers in India have been obsessed with encouraging the production of basic food grains like rice and wheat. The entire agricultural policy of India has been geared to that end. So we have had successive governments sending out strong economic signals by raising the minimum support price for wheat and rice and virtually giving a guarantee to the farmer that their output of wheat and rice would be purchased by the state at the minimum support price. Is it a wonder the India has a "buffer stock" of wheat and rice in excess of 60 million tons? No such incentives have been provided for pulses. Farmers, anyone else in an economy, respond to economic signals and the consistent signal has been to focus on wheat and rice and neglect pulses. It is only in the last few years that there has been a concerted move to correct this absurd economic signaling. But it will take years of incentives before farmers start growing pulses on irrigated land. Till then, periodic shortages will be a fact of life.</div><div> </div><div>The fifth, and most controversial reason is the drastic reduction in poverty levels that India has witnessed in the 21st century. According to the Niti Ayog (formerly Planning Commission), the percentage of Indians living in poverty declined to about 22% in 2012. According to a recent report released by the World Bank, no more than 12% of Indians are living in poverty. As family incomes have grown, there has been a sustained rise in demand for nutritious food. In some cases, like potato, a sustained increase in production has managed to keep pace with the sustained rise in demand. In most cases, like milk, eggs, pulses and green vegetables, supply has failed to keep pace with demand. That explains why the prices of these nutritious food items have grown so sharply in the last decade or so.</div>
