Pulses heartbeat
Crops are grown outside our towns. Anger over food prices grows in our towns. Put these two facts together, and you can figure out exactly how divorced, sometimes, the justifiable concern about food inflation is from the cold realities of agriculture. It is not as if we can really blame ourselves for blindness, either; the unreformed, statist nature of price discovery in agriculture insulates us, as in no other sector, from the producer, causing us to think of prices as determined by an unfeeling bureaucrat somewhere rather than dependent on supply, demand, and the monsoon.
Of course, the truth lies in between the two. No matter how heavy-handed the policy regime, economic laws win out. Over the year till July 2010, the area under cultivation for pulses has jumped by 13 per cent, according to agriculture ministry figures. Why? Not because someone in Delhi decreed it be so, but because the price of dal has jumped up. This is true, too, in broadly similar measure, for sugarcane; but pulses are particularly interesting because they are specific to India, with both the export market and possible import avenues vanishingly small in comparison to domestic production and demand. Yet, even here, the system of controls and price-setting that marks our agricultural policy have shown itself ineffective in comparison to the simple price signal that we call food inflation. As explained elsewhere on these pages today, a discussion of food prices that ignores the farmers profit-and-loss calculation is doomed to failure.
The demand and supply calculus for pulses, in particular, is only going to get worse. The government expects production to rise by 6 per cent by 2011-12, true; but domestic demand, too will rise and by about 9 per cent. The production gap will just increase, and theres nothing any price-setter in government can do about it. We are faced, thus, with the prospect of dal being permanently more expensive unless, of course, we genuinely free up agriculture, which would greater permit research and development. New varieties of pulses have been few and far between, if not non-existent, for decades. That cannot be allowed to continue. Of course, policy here will be complicated by the fact that pulses are practically never the main crop for a farmer; theyre usually a sideline, the alternative crop. Backing the large-scale commercialisation of an alternative crop is something for which we dont have a precedent. New ideas, therefore, will be welcome. Maybe we need to look abroad, to satisfy Indian demand for dal through production elsewhere perhaps Burma. Either way, unless we do something soon, we had better resign ourselves to pricier dal.