Tur Dal Woes In India: Can Higher MSP and Transparent Stock Disclosure Address The Challenge?

Traders and millers in India have urged the government to increase the minimum support price (MSP) in India for pigeon peas, commonly known as tur dal, to incentivize farmers to cultivate the crop. Low production of tur dal has resulted in high prices, and the government has set up a committee to monitor the situation. However, tur dal prices have dropped since then, posing challenges for farmers, traders, and the government. There are ongoing challenges surrounding tur dal, ranging from incomplete stock disclosure by traders and millers to the need for higher MSP for farmers etc. that we will discuss in the article.

Challenges In India

• Traders And Millers Call For Increased MSP- Traders and millers have been urging the government to increase the minimum support price in India for tur dal to address the issue of low production and high prices. Suresh Agrawal, the President of the Dal Mill Association, has highlighted that there has been less production of pulses, including tur dal, compared to last year, which has led to a surge in prices. Agrawal believes that increasing the MSP price of toor dal will encourage more farmers to cultivate pulses, including tur dal. This highlights the need for adequate MSP to incentivize farmers and boost production, ensuring a stable supply of tur dal in the market.
• Inaccurate Stock Disclosure- In response to the rising prices of pulses, including tur dal, the government has taken steps to monitor stock disclosure by traders, millers, importers, and stockists. The Consumer Affairs Secretary, Rohit Kumar Singh, has recently reviewed the status of stock disclosure of tur and urad dal with major states that produce and consume pulses. In some states, the quantity of disclosed tur dal stocks compared to its production and consumption was found to be low, indicating incomplete stock disclosure. As a result, the centre has instructed state governments to take strict action against undisclosed stocks using relevant sections of the Essential Commodities Act,1955, and the Prevention of Blackmarketing and Maintenance of Supplies of Essential Commodities Act, 1980. This highlights the government’s efforts to ensure transparency and accountability in the pulse market and prevent hoarding and black marketing.
• Lower MSP Challenges And Longer Growing Period- Tur dal faces challenges due to its lower MSP compared to other pulses like moong and a longer growing period. In case you are wondering- what is the MSP price of toor dal? Well, the current MSP for toor dal is Rs. 6600/quintal. On the other hand, moong is priced at Rs. 7755/quintal. This price difference makes other pulses more attractive for farmers, leading to lower cultivation of tur dal. Additionally, tur dal takes longer to grow compared to other pulses, which further discourages farmers from choosing it as a crop to cultivate. This poses a challenge in increasing the production of tur dal and maintaining a stable supply in the market.

Government’s Proposal: Increased Imports In India

To fulfil tur dal demand in India, the government has proposed importing more tur dal during the 2023-24 marketing year. The Department of Commerce has issued a notification stating that the government has increased the import of urad and tur dal under the “free” category until 31 March 2024, to ensure the smooth import of palm oil and pulses, including tur dal, and maintain adequate supply in the country at reasonable prices for consumers. This indicates the government’s efforts to bridge the demand-supply gap.

OFB’s Insight

The challenges in the tur dal market, including low production, slow growth, incomplete stock disclosure, low minimum support price in India etc. have contributed to price fluctuations and supply-demand imbalances. Traders and millers have called for the government to increase the MSP price of toor dal to incentivize farmers to grow the crop, while the government has taken steps to address the issue through stock verification and import policies. Ensuring complete stock disclosure, promoting sustainable production practices, and providing adequate support to farmers through tur dal MSP and other incentives can help stabilize the market and ensure affordable prices for consumers. Collaborative efforts between the government, farmers, traders, and other stakeholders are crucial to overcoming the ongoing challenges and ensuring a stable and sustainable tur dal market in India.

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