The country expects a record harvest of pulses in the current year, and if the second advance estimates are to be believed, the country will have over 16.5 million tommes(mt) of pulses , the highest ever in the country. Even though this is less than the estimated annual requirment of 18-20 million meric tonnes, it is far better than the average production of 15 mt that the coutnry has been producing in recent years , and therefore the critical dependence on imports for domestic price stabilisation is perhaps a feature of the past. This allows india greater leverage to negotiate prices with major suppliers, because the demand- supply scenario changes when India’s production figures show an upward trend. This has been made possible because of interventions under the National Food security Mission, viz , supply of quality seeds and inputs and assured procurement by designated agencies like the National Agricultural Marketing federation, and the three tier co-op structure associated with it.
However, a recent decsion of the government directing Nafed and other agencies to cap the total losses in procurement to 15% of the transaction amount has gravely affected the morale of the procuremtn agencies. Such an order defies logic – for in the first place, procuremnet is to be undertaken only when prices are ruling well belwo MSP – because the procedures involved in procurement also involve transaction cost and time. To illustrate, a farmer bringing his /her pulses to a designated procurment centre also has to bring the ‘girdawri’ (extract of the document from the local revenue official to certify that the crop has been grwon by the farmer on his own land). The purpose of the girdawri document was different, It was meant to give the governemtn a quick assessment of the cropping pattern and area at a time when there was hardly any migration to the urban centres , or aborad, and the farmer tilled the land he owned. Revenue offcials would undertake tours in the interior to inspect the fileds, and also get a feedback from the farmers about their crop conditions. All this has changed now. A sizeable number of farmers are not doing farming by themselves – and this cuts across the land holding pattern. Thus there are prosperous NRI farmers in Punjab who have given out their land for cultivation, but insist on getting their names recorded in the girdawri . The farmer is also expected to bring the prodcue to the procurment centre himslef, and an aggregation of the produce by the traditional intermediary ‘arthiya’ is not allowed, thereby pushing up costs. Moreover when the system of giving a formal role to the ‘arthiya’ has been given ‘official recognition’ bythe FCI, other procuremtn agencies are compelled to follow suit, especially when at the grassroot level, the procurment function is done by the same agency, viz, the local co-operative society.
At a recent meeting convened by Nafed (25/2/11) these points were raosed by the managing Directors of the state federations, zonal co-ordinators of Nafed and the branch managers – persons actually enagged in the nitty-gritty of procurment. They mentioend that given the current price trends, in which the market prices were at least two to three hunded rupees aboe the MSP, there was scant possibility of procuremtn. Yet they were also unanimous in their opinion that in case the MSP was not announced, or if the centres were not within easy access of the producers, the traders will not offer ‘market prices’ as the farmers would then be critically dependent on them for their liquidity. Therefore, as important as the annoucenemtn of MSP was the ‘visible presence ‘ of the procuremt centres, with all the arrangement in place – from publicity material to gunny bags , from deployment of surveyors to booking of warehouses for storage, and/or arnagemtn of vehichles to move stocks as per requirment. It is estimated that the cost of running a procurment centre for the designated period of two months will cost the exchequer sixty thousand ruppes or so, or a thousand rupees per day. Thus if a thousand such centres were to be opened in the main production districts , the total cost would not exceed Rs 6 crore, which is peanuts compared to the funds given under NFSM, or the losses which the state agrees to bear in case the procuremtn actually takes place. Why cant this jinx be broken? Why can’t procuremtn of pulses and oilseeds be at par with the procuremtn of wheat and rice ?
The reasons are as follows . Unlike the FCI, the procurmetn of pulses and oilseeds is with the co-operative sector, and this has not received the MFN status is enjoyed by FCI in the filed of procurement . Traditionally, the focus has been on wheat and rice, and as long as the procuremtn of these two cereals is sufficent to meet the requiremtns of PDS and the buffer stocks the country feels ‘food secure’. It is only now that the country has started making the transition from food security to nutrition security – and when this thought becomes mainstream, pulses and edible oils will become equally, if not more criticial, especially as rising disposbale incomes at all levels, with food entitlements under the Right to Food bring about the transformation in the way we have looked at our food consumption requirements. Pulses, oilseeds and coarse cereals were alwys poor cousins – and thus support for their procuremtn was not on the same pedestal as support to FCI – which is perhaps the world’s largest food grain handling agency in the world. FCI also allowed the co-op agencies to utilsie the servcies of local aggregators , viz arthiyas to consolidate the farmers produce at the village level, thereby cutting costs and adminstrative delays.
Thus the writing on the wall is clear. If the country is serious about pulses and oilseeds, announcing the MSP is not enough. Let the procuremtn agencies for these commodities be treated at par with the tohers. Give a mobilisation advance to the the co-operatives as well. And over the next few years, allow larger aggregators to compete with the co-operatives and PSUs in procurment on an equal footing.