IPGA urges Government to assuage fear of traders about stock monitoring exercise

  • Raises concerns about the apprehension among traders and their reluctance to procure domestic produce as well as import pulses
  • On the basis of data available on the Ministry of Agriculture website, there is a strong possibility of shortage in pulses production, especially due to uncertainty with respect to sowing in this crop year due to COVID-19 pandemic.
  • Highlights the key role played by the trade in the farm-to-fork value chain and asks for consistent and long term policies and recommends a few options for the Government to explore
  • Basis studies conducted over the last few years, IPGA draws attention to the spread of the retail prices on the shelf which have traditionally been very high and urges Government to initiate steps to curb the practices of the retail sector. This is further strengthened by the fact that RBI in their annual report talked about the rising wedge between wholesale and retail pulses

India Pulses and Grains Association (IPGA), the nodal body for the pulses trade and industry in India, today held a press conference to draw the attention of the Government towards the effects on the trade following the instructions issued by the Ministry of Consumer Affairs, Food and Public Distribution. The Dept. of Consumer Affairs (DoCA) on May 17th, has asked the Food and Civil Supplies Departments of State/UT Governments to use the provisions of the Essential Commodities Act (EC Act) 1955 to ensure adequate availability of the scheduled commodities at fair prices to the common people. The DoCA has also advised the State Departments to direct pulses stockholders like Millers, Importers, Traders, etc. to declare their stock holding and also to verify the same.

Mr. Bimal Kothari, Vice Chairman – IPGA

Mr. Bimal Kothari, Vice Chairman – IPGA, addressing the press conference said, “These instructions have only served to create apprehension amongst trade stakeholders who are now hesitant to buy domestically produced pulses as well as import pulses. This is defeating the very purpose of the Government’s move to remove the restrictions on the imports of Tur, Urad and Moong.”

Mr. Kothari further stated, “As per the 3rd Advance Estimates data sourced from the website of the Ministry of Agriculture, for the Crop year 2020-21, Tur production is expected to be lower by almost 7 lakh metric tons and Urad is expected to be lower by 5.20 lakh metric tons and the overall Kharif Production is expected to be lower by 2.12 million metric tons. However, as per trade estimates, the production for Tur has been around 2.90 million metric tons, Urad approx. 2.06 million metric tons, Moong around 2 million metric tons, Chana around 9 million metric tons and Masoor around 0.95 million metric tons. Given the ongoing COVID-19 pandemic, IPGA is expecting further shortages of pulses in the forthcoming crop year and believes that as the apex body for the trade, it is IPGA’s responsibility to bring this to the Government’s notice well in advance.”

Mr. Kothari also added, “The Government’s objective is to double farmers’ incomes and that can happen only if the trade can freely procure their produce without fears of coercive action from the Central and State Governments. On the other hand, the Government also wants to ‘ensure adequate availability of the scheduled commodities at fair prices to the common people’. The traders are worried that legitimately procured stock also might come under scanner and in ambit of EC Act land the trader on the wrong side of law for no fault of his. Hence, the Ministry of Consumer Affairs, Food and Public Distribution needs to issue a categoric clarification stating that their intentions are to just monitor stocks held by the trade for policy purposes which will help assuage the apprehensions of the trade.”

Mr. Kothari, speaking about the high prices of pulses on retail shelves said, “The Government needs to monitor the prices at the retail end very closely. IPGA, over the last few years has been tracking the prices at the retail level vis-à-vis the prices at wholesale or ex-mill level. We have found that the prices at retail level have traditionally higher than the wholesale/ex-mill rates by an average of Rs. 50/- per kg. In current times, while the average wholesale prices of have been around Rs. 95/- per kg for Tur dal, Rs. 110/- per kg for Urad daland Rs. 92/- per kg for Moongdal, the average retail prices have been Rs. 130/- per kg for Turdal, Rs. 160/- per kg for Urad daland Rs. 115/- per kg for Moongdal. However, anytime there is a discussion about high prices, the spotlight is placed on the traders and not the retailers. This needs to change. The retail segment also needs to be held accountable for the high prices and the same be monitored as well. This is further strengthened by the fact that RBI in their annual report talked about the rising wedge between wholesale and retail pulses.”

IPGA, in the press conference, has suggested a few steps that can be initiated by the Government, more so by the DoCA:

  • Setting up an MRP (maximum retail price) for pulses so that they are not sold at unnaturally high prices to consumers. This can be achieved by the DoCA basis the data that wholesalers and retailers upload to the DoCA website on a daily basis.
  • IPGA has urged the Government to explore the option of using import duties as an option to protect the interests of domestic farmers as well as the consumers. The Government can impose duties to a level that ensure the final landing price of the imported pulses stays well above the MSP. This way, the trade will prefer to buy domestic produce when the prices are ator just above the MSP levels and if there are shortages, they can import these commodities to bridge the demand-supply gap to ensure adequate availability at affordable prices.
  • IPGA has urged the Government to ensure that any changes in policy framework is maintained for atleast a period of 6 to 9 months to ensure that there is no speculation which could affect the prices overseas and in India and the trade can function in a smooth and efficient manner.

IPGA also stated that the Government needs to take into consideration key factors that govern the availability of pulses while drafting policies. Some of the factors are:

  • Domestic production
  • Production in overseas origins and their harvesting periods
  • Logistical issues like time taken from contracting produce and its sailing time from origins to India
  • Other countries that are also looking at buying the overseas produce and therefore possible availability for India to import these commodities
  • Effects of COVID-19 pandemic in India and overseas on sowing, harvesting as well as logistics

Mr. Kothari further added, “We need the Government to recognize the fact that the trade is key link in the farm-to-fork value chain. If the trade reduces its procurement of pulses from the farmers, it will directly affect their earnings and will also result in lesser supplies to the consumers which will lead to shortages at the retail end and drive up the prices making them unaffordable for consumers.”

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