Pulse Prices

Pulse prices refer to the market prices of pulses (leguminous crops) such as tur (arhar), urad (black gram), moong (green gram), masur (lentil), gram (chana), and peas, which are vital sources of protein and nutrition in the Indian diet. Pulses are a staple food in India and play a crucial role in the country’s food security, nutrition, and agricultural economy.
However, their prices often fluctuate sharply due to factors like production variability, weather dependence, limited storage, and trade restrictions, making them a key focus of agricultural and price policy in India.

Importance of Pulses in India

1. Nutritional Value:
   • Pulses are rich in protein, fibre, iron, calcium, and vitamins, making them a major protein source for a largely vegetarian population.
2. Agricultural Significance:
   • Pulses are nitrogen-fixing crops, which improve soil fertility and reduce the need for chemical fertilisers.
   • Usually grown in rainfed, marginal, and dryland areas where other crops may not thrive.
3. Economic Importance:
   • India is both the largest producer and consumer of pulses in the world.
   • Fluctuations in pulse prices have a direct impact on household budgets, inflation, and food security.

Factors Influencing Pulse Prices

Pulse prices in India are influenced by both supply-side and demand-side factors.

1. Supply-Side Factors

1. Monsoon and Weather Conditions:
   • Pulses are primarily grown under rainfed conditions (less irrigation coverage than cereals).
   • Deficient or erratic monsoons directly reduce yields, leading to price spikes.
2. Limited Cultivation Area:
   • Farmers often prefer cereals or cash crops due to higher yields and assured procurement, leading to limited area under pulses.
3. Low Productivity:
   • The average yield of pulses in India (~900–1000 kg/ha) is much lower than that of cereals due to poor seed quality, limited irrigation, and pest attacks.
4. Storage and Processing Constraints:
   • Inadequate warehousing and post-harvest losses reduce market supply.
5. Import Dependence:
   • Domestic production is often insufficient to meet demand; India imports pulses from countries such as Myanmar, Canada, and Australia.
   • Import restrictions, tariffs, or global price fluctuations impact domestic prices.
6. Government Procurement and Stock Policies:
   • Unlike rice and wheat, pulses have limited government procurement, leading to price volatility.
   • Delays in releasing buffer stocks can also affect market prices.

2. Demand-Side Factors

1. Rising Population and Incomes:
   • Growing population and higher incomes increase demand for protein-rich foods like pulses.
2. Dietary Shifts:
   • Urbanisation and changing food habits are increasing pulse consumption.
3. Substitute Prices:
   • Prices of other protein sources (milk, meat, eggs) can influence pulse demand.
4. Inflationary Pressures:
   • General food inflation often drives up pulse prices due to interlinked markets.

Historical Trends in Pulse Prices

1. High Volatility:
   • Pulses have historically shown greater price volatility compared to cereals.
   • Major price spikes occurred in 2006–07, 2010, and 2015–16 due to poor harvests and low global supply.
2. 2015–16 Price Spike:
   • Prices of tur and urad crossed ₹200 per kg in retail markets due to drought and production shortfall.
   • The government responded by importing pulses and releasing buffer stocks.
3. Recent Trends (2020–2024):
   • Moderate stability achieved through improved domestic production and imports.
   • However, climate variability and global market disruptions (such as the COVID-19 pandemic and geopolitical tensions) have kept prices elevated.

Government Policies to Stabilise Pulse Prices

1. Minimum Support Price (MSP):

• The government announces MSPs for major pulses such as tur, urad, moong, masur, and chana each year.
• Objective: To encourage pulse cultivation and ensure remunerative returns to farmers.
• However, actual procurement at MSP remains limited compared to cereals.

2. Buffer Stock Policy:

• The National Food Security Mission (NFSM) and Price Stabilisation Fund (PSF) enable the government to build buffer stocks of pulses.
• Stocks are released in the open market during shortages to stabilise prices.

3. Import Policy:

• Imports are regulated to manage domestic availability and price stability.
• Import duties are revised based on market conditions (often reduced during shortages).

4. Production Incentives:

• The National Food Security Mission on Pulses (NFSM-Pulses) launched in 2007–08 to boost productivity and area under pulses.
• Promotion of high-yielding and drought-resistant varieties through ICAR and agricultural universities.

5. Market Intervention Scheme (MIS):

• Used to procure pulses when market prices fall below MSP to protect farmers’ incomes.

6. Price Monitoring Cell:

• The Department of Consumer Affairs monitors wholesale and retail prices of pulses to identify trends and prevent hoarding or speculation.

Impact of MSP and Policy Measures

• The MSP for pulses has been increased regularly to incentivise production.
• Example (2023–24 MSPs per quintal):
  • Tur (Arhar): ₹7,000
  • Urad: ₹6,950
  • Moong: ₹8,558
  • Masur (Lentil): ₹6,425
  • Chana: ₹5,440

However, procurement and enforcement remain weak, leading to inconsistent benefits for farmers.

Challenges in Stabilising Pulse Prices

1. Low Productivity and Yield Gaps compared to global averages.
2. Limited Irrigation and Technology Adoption.
3. Hoarding and Speculative Trading during shortages.
4. Dependence on Imports, exposing prices to international volatility.
5. Inadequate Storage and Supply Chain Infrastructure.
6. Low MSP Procurement Coverage, especially in non-traditional pulse-growing regions.

Measures to Improve Stability and Supply

1. Expanding Pulse Cultivation:
   • Integrating pulses into crop rotation systems with cereals (e.g., rice–pulse, wheat–pulse).
2. Enhancing Productivity:
   • Promoting improved seed varieties, irrigation, and scientific farming practices.
3. Strengthening Procurement and Storage:
   • Building dedicated pulse procurement networks and warehouses.
4. Research and Extension Services:
   • Encouraging ICAR, IIPR (Kanpur), and Krishi Vigyan Kendras to develop high-yielding, pest-resistant varieties.
5. Market Reforms:
   • Improving access to e-NAM (electronic National Agriculture Market) and transparent price discovery.
6. Balanced Trade Policy:
   • Timely imports and exports to smoothen domestic price fluctuations.

Recent Developments

• India’s pulse production reached ~27–28 million tonnes (2022–23) — a significant rise due to MSP hikes and NFSM support.
• Yet, demand (~30 million tonnes) continues to outstrip supply, causing periodic price pressures.
• Climate events like El Niño and erratic monsoons continue to pose risks to production and price stability.