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Challenges in Indian Pulses Industry

Posted on 20th January 2020 by Dr. Hanish Kumar Sinha, Deputy Vice President - Research & Development, NBHC

Pulses are the important sources of proteins, vitamins and minerals and are popularly known as "Poor man’s meat” and "rich man’s vegetable”, contribute significantly to the nutritional security of the country. Currently India is in the midway of self-sustaining in pulses production as we are the world leader in production, consumption and import. Since ages, pulses have been well integrated into the farming system of our country as the farmers could produce them by using their own seeds and family labour without depending much on external inputs.With the advent of Green Revolution, which promoted rice and wheat using external inputs and modern varieties of seeds, pulses were pushed to the marginal lands resulting in significant decline in productivity. The pulses are still cultivated on the marginal and sub marginal land, predominantly under un-irrigated conditions. The other constraints in the process of pulses production are unfavourable weather conditions, abnormal soil conditions, agronomic practices, input quality and its availability, availability of high yielding varieties, pests and diseases, availability of proper infrastructure, credit, marketing and pulses centric policy. If we analyse the development of the Indian pulses production trend, it is the culmination of all the above factors which has led to the underperformance of this sector.

India continues to be the largest producer (25 per cent of global production), consumer (27 per cent of world consumption) and importer (14 per cent) of pulses in the world. Pulses account for around 20 per cent of the area under foodgrains and contribute around 7-10 per cent of the total foodgrains production in the country. Though pulses are grown in both Kharif and Rabi seasons, Rabi pulses contribute more than 60 per cent of the total production. The stagnation in pulses production and continuous increase in population has led to significant decline in the per capita availability of pulses which in 1951 was 60 g and has dwindled down to about of 56 g in the year 2018. In India, pulses production during 2019-20is expected at 22.62 million MT. About 75 per cent of total pulse production is being produced in5 states of Madhya Pradesh (29.67 per cent), Maharashtra (14.66 per cent), Rajasthan (13.57 per cent), Uttar Pradesh (9.03 per cent) and Karnataka (7.60 per cent). India majorly produces Chickpea with the contribution of 48 per cent followed by Pigeon Pea 14 per cent, Black Gram 12 per cent, Green Gram 8 per cent and Lentil 7 per cent. As far as 2019-20 production is concerned, Green Gram, Black Gram,Pigeon Pea and Lentil production is expected to decline by 23 per cent, 13 per cent, 11 per cent and 5 per cent, respectively whereas the production of Chickpea is expected to improve by 8 per cent over the last year.

Production of Major Pulses in India       (Million MT)

Commodity 2015-16 2016-17 2017-18 2018-19 2019-20*
Chickpea 7.06 9.38 11.38 10.13 10.93
Lentil 0.98 1.22 1.62 1.56 1.48
Pigeon Pea 2.56 4.87 4.29 3.59 3.21
Black Gram 1.95 2.83 3.49 3.26 2.82
Green Gram 1.59 2.17 2.02 2.35 1.80
Other Pulses 2.18 2.66 2.62 2.51 2.38
Total Pulses 16.32 23.13 25.42 23.40 22.62

Source: Ministry of Agriculture, DACNET & *NBHC Estimates

Uncertainty in Production Cycle - Yield Gap Analysis

The yield gap analysis shows the wide potential up to which one can enhance the overall production of pulses in India without making substantive changes in the acreage. In the current system of production we are not even able to match up with lab yield and are lagging too far behind the international standards. In India the pulses yield gap (yield Achieved in Experimental Lab Conditions to the actual Farmer’s field in India) in Pigeon Pea almost 50 per cent, followed by Green Gram 45 per cent,Black Gram 34 per cent, Lentil 38.30 per cent and Chickpea 31.23 per cent. The area under pulses has increased from 24.91 million hectares in 2015-16 to 29.41 million hectares in 2019-20, but pulses productivity in India is very low and has not allowed the level of production to match up to the growth in demand thereby has increased the dependency on imports.

Yield Gap Analysis

Pulses Field Level Demonstration 2019-20* % Yield Gap over 2019-20
Pigeon Pea 1394.00 701.50 49.68
Black Gram 813.00 538.11 33.81
Green Gram 781.00 428.83 45.09
Chickpea 1502.00 1032.99 31.23
Lentil 1289.00 795.32 38.30

Source: Indian Institute of Pulses Research &*NBHC Estimates

Need for Long Term Policies Initiatives

Pulses production in India has been marred by absence of high yielding varieties which could be pests and diseases resistant, low level of mechanisation in entire framing practice, lack of assured market, ineffective government procurement operations, unfavorable prices and trade liberalization make pulse production less attractive for farmers compared to other crops. Sensible agronomic practices such as wet and dry system of irrigation, and profitable crop rotation should be encouraged to the farmers to reduce the build-up of pest, diseases and weeds. Concerted efforts should be made to supply agricultural equipment’s including harvesters and threshing machines on custom hiring basis so that resource poor farmers can avail these services at the village level. Construction of common godown should be encouraged among local farmers with active support from various agencies. Infusion of new technologies, better practices, coordination and investment in rural infrastructure should be encouraged. Amount of pre and post-harvest losses caused by biotic and abiotic factors is found to be substantial and for this the advantages of Information and Communication Technology (ICT) should be tapped to provide practical advice for control of insect pests, diseases and weeds.There is a need to step up not only the amount of public and private investment in building rural agricultural infrastructure, but also quality of such investments should be channelized properly. There is a need for rejuvenation of the government extension agencies for approaching the farming community and making themselves indispensable to curtail the dependence of farmers on private input dealer and traders & stockiest for selling off their produce. The lack of a supporting mechanism for the procurement and marketing of pulses has been a major impediment to the propagation of pulses. Incentivising pulse production through the price mechanism will only work once the farmer is assured that the government will procure pulses. The active participation of the government can be substantiated through a designated central or State nodal agency, similar to the FCI or NAFED, for assured procurement of pulses at the State level.

Inadequate Warehousing Facilities & Collateral Finance

The demand for warehousing sector is been on the continuous rise with significant increase in overall food grain production. The total procurement by the Government agencies comes to about 33 per cent of the total production which totals to about 115.03 million MT once the minimum buffer stock is added. The above calculation leaves about 169.92 million MT for private & corporates which has the total warehousing capacity of about 77.68 million MT. We have considered the fact that as the Kharif season storage is being completed, the outgoing process is also proceeding for the already stored food grains simultaneously as per the industrial / retail demand and to incorporate that we have introduced the overlapping factor. The maximum food grain likely to be stored comes to about 95.55 million MT, which has been calculated based on the overlapping factor. Thus the final gap in the storage or the expected potential for expansion of agri-warehousing industry currently stands at 20.23 million MT.

Status of Indian Agri-Warehousing Industry (2018-19)

Particulars Million MT
Total Foodgrain Production 284.95
Govt. Procurement (~33%) 94.03
Minimum Buffer Stock 21.00
Total Stock in Stored by Govt. 115.03
Total Storage Capacity with Govt. 75.08
Overlapping factor for Kharif & Rabi* 1.23
Balance left for Pvt. Trade/Warehousing 169.92
Direct Industry Utilization (11%) 31.34
Retention by Farmers (10%) 22.80
Stock Left For Private Storage/Trade 115.78
Current Storage Capacity (Corporate + Private) 77.68
Total (C & P) Storage Available Annually 95.55
Potential of Expansion of Warehousing 20.23

* Overlapping Factor arrived on Hypothesis that all stocks are not cleared from warehousing once the season changes from Rabi to Kharif or wise-versa.
Source:Source: Data Analysis Done by the Author

The pulses enjoys about 7.5 per cent of the total organised warehousing space available in the country (~14.10 million MT) against the total production of about 23 million MT.The pledging / collateralization of agricultural produce with a legal backing in the form of NWR would lead to increase in flow of credit to the rural areas, reduce the cost of credit (due to certainty of recovering credit by the bank) and would spur other related activities, like standardization, grading, packaging and insurance services in the pulses sector.The potential size of the collateral financing market in pulses is about 8700 Crores of which Pigeon Pea takes the lion share of about 41 per cent followed by Chickpea with about 28 per cent and the other pulses cumulatively adds up to the balance 31 per cent.

Collateral Financing Market in Pulses

Commodity Loan Amount (Rs. Crore) % Business Share
Pigeon Pea 3577.94 41.12
Chickpea 2484.59 28.55
Other Pulses 2639.29 30.33
Total Pulses 8701.82 100.00

Source: Compiled from Sources

SWOT Analysis – Indian Pulses Production

Pulses historically have been one of the most important constituent of the Indian cropping and consumption patterns. Pulse crops form a unique feature of our farming system, particularly in dry land agriculture. Pulses are packed with nutrients and have high protein content, making them an ideal source of protein particularly in regions where meat and dairy are not physically or economically accessible and in order to ensure self-sufficiency, the pulse requirement in the country is projected to be 32 million MT by 2030. With pulses playing a pivotal role in promoting national food security, we need to introduce better seed varieties that are high-yielding, disease and pest-resilient, improve crop production techniques and bring additional fallow lands under pulses production. It is here is where agricultural universities, research institutions and KrishiVigyan Kendra (KVK) can play a big role in improving the lot of the farmers and empowering them. Agriculture Universities need to focus more on improving the yields of pulses, while KVKs should act as a bridge between scientists, governments, and farmers. Thus effective SWOT analysis is the need of the hour which can help to plug in the loopholes which is pulling restricting the significant rise in production in spite of several steps being taken up by the government and research agencies.

The strength in the Indian agricultural production system is that it has huge rice fallow acreage (> 11.7 m ha) which could be utilised for pulses cultivation. The other strengths are availability of cheap labour, possibility of higher yield realization and untapped yield potential in most of the pulses, feasibility and viability in growing pulses (technical & socio-economic considerations), unexploited and unexplored and soil fertility for successful pulses cultivation and large quantum on monsoon rains. The weak link in the production cycle is the unavailability of quality seeds (replacement of seed/variety), low level of mechanisation, unavailability of irrigation in major growing areas, acute abiotic stress (mid& late season drought or popularly called as terminal drought, low marketable surplus, uncontrolled Incidence of biotic stresses (pests & diseases) and lack awareness towards diagnosis and control. Going by the above weakness, the opportunities in this sector is huge. One can work to motivate farmers to grow more pulses leadingto augmentation in farm income, generation of additional employment and leading the country to self-sufficient in pulses production. The major threats in the pulses production is the pushing back of the pulses to the marginal and sub-marginal areas with expansion of irrigation in command areas. Pulses are highly prone to damage by insect-pest, diseases, nematodes and weeds. Underutilizations of resources reflects a poor-resource base of the farmers and have implications for optimum utilization of inputs and production of outputs, both on farm and in processing unit to reduce allocation and scale inefficiencies.Improvement is much needed in field of better enforcement of regulated markets, strengthening the appropriate market institutions, introduction of forward marketing,contract farming and promotion of market forward and backward market integration.

Dr. Hanish Kumar Sinha
Deputy Vice President - Research & Development
National Bulk Handling Corporation Pvt. Ltd.