Agricultural Commodities - Pulses

Market at the micro-level has to serve three main stakeholders with different expectations. Farmers wants good price and constant demand, distributor wants fat margin and consumer wants low prices and quality product. In the market scenario at macro-level production of the pulses, demand-supply conditions within India, volatility in global commodity prices, variation in exchange rate, policy of the government, and a surge in import can lead to determination of final price of the any commodity. 

This article series aims to provide an introductory overview on the agricultural commodities in India. The first article of this series will carry the discussion by offering an analysis of the pulses in India. India is the world’s largest pulse producing, consuming and importing country. Bengal Gram (Desi Chick Pea / Desi Chana), Pigeon Peas (Arhar / Toor / Red Gram), Green Beans (Moong Beans), Chick Peas (Kabuli Chana), Black Matpe (Urad / Mah / Black Gram), Red Kidney Beans (Rajma), Black Eyed Peas (Lobiya), Lentils (Masoor), White Peas (Matar) are major pulses grown and consumed in India. During 1950-51 to 2013-14, area under pulses increased by 31% from 19.09 million hectares [mha] to 25.23 [mha] and productivity per hectare increased by 46% from 441 kg to 764 kg with significantly disappointing 0.64% CAGR of productivity. Even the area under cultivation for pulses has seen marginal increment, there is shift in the quality of land used for pulses production.

Green revolution has pushed pulses cultivation in tough terrains resulting in declining productivity. As pointed out by Santa Kumar Committee Report: "GoI needs to revisit its MSP policy. Currently, MSPs are announced for 23 commodities, but effectively price support operates primarily in wheat and rice and that too in selected states. This creates highly skewed incentive structures in favour of wheat and rice. While country is short of pulses and oilseeds (edible oils), their prices often go below MSP without any effective price support. Further, trade policy works independently of MSP policy, and many a times, imports of pulses come at prices much below their MSP. This hampers diversification." Hence, the government needs to create a crop-neutral incentive structure for farmers, which is at present skewed in favour of rice, wheat and sugarcane.

Pulses have low carbon emission and water needs which make them ideally suited in India’s farming system. Rainfall in India is highly unreliable both in time and geography, leading to fluctuation in the production. The major driver of food inflation was the hike in prices of pulses, which was caused by the crop loss due to untimely rains. India’s pulses production fell from 19.25 million tonnes in 2013-14 to 17.3 million tonnes in 2014-15, while imports rose from 3.18 million tonnes in 2013-14 to 4.58 million tonnes in 2014-15. With the sky rocketing prices of the pulses, the government has taken haste decision to import 7,000 tonnes of Tur (5,000 tonnes earlier, and 2,000 tonnes now) to tame prices. In a country where the consumption of tur daal hovers between 3.3 to four million tonnes, aiming to control rising prices by importing 7,000 tonnes tur shows both the policy failure in pulse price management and strong cartel of importers artificially jacking up the prices. Ineffective policy measures appear to be knee-jerk reactions more than calibrated responses of policymakers.

No pulses are currently traded in future in international markets and only Chana is traded in future in domestic markets. The Securities and Exchange Board of India (SEBI), which also regulates the commodities futures market, may consider banning forward trading in chana (gram) as part of the government’s measures to bring down prices of pulses. By suspending futures and forwards markets, the government can simply shot the messenger. This is only evidence of a rather sloppy conceptual framework of policymakers. Merely scapegoating traders as  “hoarders” and “speculators” is not going to be effective in today’s times. Also, traders hold the strings to the political purse, and a crackdown against hoarding would be damaging for ruling political party. Forwards and futures markets are supposed to give signals for effective price discovery and efficient price risk management. It is therefore necessary to develop suitable futures contracts for major pulse varieties separately, as also for all pulses together in the form of index futures.

Pulses are now termed as crops for poor, largely cultivated in marginal lands prone to poor irrigation supplies. Low pulse yield in India compared to other counties is attributed to poor spread of improved varieties and technologies, abrupt climatic changes, vulnerability to pests and diseases, and generally declining growth rate of total factor productivity. Lack of effective market news system and existence of different grades and qualities have also contributed to these imperfections in market. Appropriate reporting with quality differences and graded produce could go a long way to reduce the high price differentials, spatial as well as temporal.

Readers can also read a good article in IPGA examining the price issue of pulses. Jokes comparing  butter-chicken  to pulses are already in the market, and the trend doesn't look good for next year. It will be much shame for current government promoting 'Make in India' campaign while importing pulses, oil-seeds etc from foreign nations. India government needs to get the act together if they are truly committed to the food security of our fellow citizens.

Adieu Udaipur !

Today is my last day at Access Development Services (ADS). I started eighteen months ago managing Farmer Producer Companies (FPOs) at South Rajasthan. I am very proud of my team, and I wish them well. They have a lot of challenging work ahead. But for me, it’s time to move on.  I’m not going to sugarcoat the reasons for my exit. This might be my last chance to switch sector since I am not getting any younger. I have taken a role of Operations Manager in Chaitanya at Pune that works in the micro-finance sector. I recognize the task before me is neither small nor easy. Microfinance means different work-style and leadership.

The profile of a candidate in the development sector belongs to someone who easily adapts to new environments, enjoys travel and field work, likes to tinker with things, and prefers independence and improvisation to super specific tasks. Strong people management skills is a bonus learning, and much required. One can't always be the smartest person in the room, but one can always be the most prepared person in the room.

I have learned most about networking, human resource management and leadership abilities in this job. I had mostly taken decision in an inclusive way as a part of management. That had lowered efficiency in some cases but have helped in creating an atmosphere of trust with community and co workers. There will always be few relationship more important than hierarchy in the organization. These relationship can be with the field worker or CEO of the organization. They’re worth investing in and maintaining for a long term.

It is vital for me to know my own strength and weakness. I have progressed but have seriously under-performed in terms of its potential. I had missed few professional goals in the journey. This can be attributed to the lethargy and unguided career management. I have a minor trait as bit of mental frustration pile up gradually under job pressure. By intrinsic nature, I struggle to be realistic about my own ability, and importantly, my limitations.

I live by certain ideologies that help me know when I am doing wrong as a rural manager. I take pride in the work. I do and feel equally responsible for the success and failure of how the country and society function. ‘Development’ and ‘benefit’ are not values-free concepts, but rather have different interpretations of each individual & organization. I believe today in dynamic world that development is both the promise of inclusion and equal opportunity on the one hand, and the rhetoric of competition and relative advancement on the other. 

How a little of the word, I know, even at the age of thirty. I saw the cruel fate of millions of their daily struggle for life and dignity. Through them, I learned a lesson in humility and endurance. I ended up being their students and learnt about farming, relations, migration for work and household issues. The places where one discovers his own hidden individuality are never on the map. They are just out there, may be in a remote village or just in the middle of a cosmopolitan city. Udaipur helped me to refine and redefine my capabilities. Real life scenario is always further off the projections when individuals assess their own career plans, partly because their chances, desire to succeed and hard work create a new future.

I want to bid farewell to my ADS team. There is no way I could have achieved all that I have without their help. I have a sense of achievement and happiness over the span of months. I’m thankful for the opportunity that I had at ADS. I learned more than I thought I would. It was challenging to work for donors such as Rabobank Foundation, Small Farmers' Agriculture-Business Consortium (SFAC), World Vision India & Department of Agriculture, Rajasthan Government. I was lucky to have interaction with livelihood experts like Sankar Datta and Vipin Sharma with various representatives from institutions such as World Bank - India, Fair Trade India, Hivos International, Sir Ratan Tata Trust & Navajbai Ratan Tata Trust (SRTT), IDBI Bank, Ananya Finance, Friends of Women's World Banking (FWWB), CARE Bangladesh, MART & Rajasthan Grameen Aajeevika Vikas Parishad (RGAVP). Here’s to new challenges and new opportunities.  I am still on the way to chase profits with purpose as a rural manager and will quote Gandhi's words while taking decisions on career: "Whatever you do will become insignificant, but it is very important to do it." 

Thought of the Day:

The Dark World of NGOs

Do you know that only about 10 per cent of the over 22 lakh NGOs file their annual income and expenditure statements with the authorities ? As per given Source- A total of Rs 13,051 crore foreign contribution was received by 17,616 NGOs in the country in 2013-14, Rs 11,527 crore by 20,497 NGOs in 2012-2013 and Rs 11,558 crore by 22,747 NGOs in 2011-2012. Also quoting another Source- The main change is that all NGOs will have to make public each foreign contribution received by them within a week of the receipt, on their official website or a website prescribed by the government.

Foreign Contribution Regulation Act (FCRA)is a regulatory tool that enables monitoring and control of foreign funding. It will be better to know about pros and cons of this tool before going in this debate. PMO has initiated exercise to tighten monitoring over NGOs in the country. Intelligence Bureau has given inputs to "improve oversight and increase transparency" in the working of the voluntary sector in India. The crux of the IB report lies that foreign-aided NGOs are actively stalling development project.The reputation of the NGOs is on thin ice due to corruption but one must look overall problem in context of current government policies.

The paranoia of foreign hands begins with former Prime Minister Indira Gandhi, who was extremely worried of NGOs that she assumed to be puppeteered by foreign agencies. The current saga began with the offloading of Greenpeace activist Priya Pillai and blocking fund of Ford Foundation. While Greenpeace is instrumental in raising voice over Kudankulam project, Ford Foundation came on scrutiny due to funding of human rights activist Teesta Setalvad’s NGO fighting for the rights of Gujarat riot-victim. The success story of Ford’s grant making programme in India are Arvind Kejriwal, Manish Sisodia, Yogendra Yadav, Kiran Bedi and Anna Hazare. In an exceptional situation, both Modi and Left see these foundations as the capitalist interests of the west for different reasons. PRIA has removed an article advocating Ford Foundation as model for philanthropic initiatives in India while maintaining the web link at twitter.

Before demonizing either government or NGO sector, let us look into this matter with open mind. There is surely shift in ole of government aid paradigm. Government of India is funding projects only for service delivery project to NGOs. NGO-isation of India's HIV/AIDS program has widened the field of non profit organizations participation in government programmes. The success of this apparatus is connected the episodic failures in service delivery and addressing HIV-related stigma comprehensively in the present due to lack of government extension staff. Also, the rights-based approach being adopted by state governments in their various Acts has no or little merit in practical realities. There are no funds available to monitor implementation of the rights based laws. The additional nail in the coffin for protesters is lack of fund for human rights, democracy and law enforcement. No organizations in India will go on the wrong side of state by giving funds to protesters (problem groups). This has led to the dependency on funds from foreign donors.

In 2014, the UN Special Rapporteur on the Rights to Freedom of Peaceful Assembly and of Association, Maina Kiai highlighted three general principles to protect civil space. The ability to seek, receive and spend money is one of them. Current government can't criminalize dissent but they are cleverly having a crackdown on foreign-funded dissent. Current laws fail to define anti national & political activities leading to mishandling of the protesters. And a thumb rule about power in India is that whenever interpretation of regulation is left completely up to the imagination of the state without any establishment of independent institution, the net result is nearly always discretionary and prohibitive.The roots of democracy lie not in the government but in social relations and freedom of speech. The means of protest in the state shows us the real power of citizens and voluntary sector. One must remember words of Vinoba Bhave - "What we should aim at is the creation of people power, which is opposed to the power of violence and is different from the coercive power of state."

But the news isn't good for voluntary sector itself.It will not be an understatement that funding to voluntary sector is largely decided by bribes and political affluence. NGOs are used as siphons to route black money by corrupt entities and individuals! The voluntary sector is a den of corruption and corrupt NGOs needs to be completely weeded out.They must make full and public disclosure of their funding and expenditure. They must also be made answerable under the RTI Act. The era of accountability and transparency has to began in the voluntary sector.

The job of NGOs, whistle-blowers and the media is to keep the entire government apparatus humble and they have a universal responsibility for the protection of innocents even that means wrath of state. Corruption in any form must be curbed if we wish to become a developed society' . Robert Klitgaard, a world famous authority on corruption, famously declared that corruption is equal to monopoly plus discretion minus accountability (C=M+D-A ). Both government officials and NGOs have looted funds in the name of poor, disabled, women and minorities. It is important to handle matters of the state and voluntary sector with transparency and accountability. There are tough questions for us citizens to answer now. Do NGOs really know the interest of donors while protesting before government ? Can government go ahead with any “development project” as a rhetorical national interest without consulting all stakeholders? If any citizen disagree with govt and take to the streets, should the IB keep a tab on the concerned citizen? The debate is much recommended, even if it will raise more questions than it can probably answer.

*Please also read articles of Jay Mazoomdaar in Firstpost, Harsh Mander in Scroll & Samanth Subramanian in The Guardian dissecting the dark world of NGOs.

Livelihoods Asia Summit 2015

Livelihoods Asia Summit 2015 was being held on December 10 and 11 at New Delhi, India. The Summit sessions were around topics like skill development, impacts of climate change on livelihoods, inclusive value chains, policy innovations, and private sector partnerships among the approaches that offer a pathway out of poverty. The summit has more than hundred delegates working as sector specialists, practitioner and advocates in the livelihood sector. Panel sessions and other live events are great — especially the Q&A ranges from absurd to tricky.

There was focus on policies, programs, private players and potential in poor during the sessions. There was emphasis by panelist to think of poverty as a dynamic and multidimensional phenomenon. There are so many policy level talks on SHG and FPO but the dialogues on next generation of institution was lacking in the summit. The summit also ignored rights-based approaches to livelihood development while there is a strong body of literature exists showing the correlation between empowerment and economic productivity.

There are two school of thoughts emerging in usage of poverty alleviation fund. One views the establishment of the community institution through participation of the civil society organizations while other pitches for direct benefit transfers to the beneficiaries. Government official from Rural development ministry pointed success of universal primary education and connectivity to rural areas through PMGSY. The welcome part was an eye opening session on the impact of climate change on livelihood of ultra poor. Experts suggested that the people need risk transfers and insurance protection for livelihood recovery post disaster.

I enjoyed much of the time in the summit.  As much I got out of the conference, I know there is still more to learn and more to share. Yet, I have always wondered about these summits where every leader talks about what needs to be done! But they are the ones who should be doing it ! The underline of the summit - No one organization can eradicate hunger and reduce poverty alone, only in partnerships with a broad range of stakeholders can all of us achieve the goals.

Inclusive Finance India Summit 2015

ACCESS has hosted the Inclusive Finance India Summit from December 8th to 9th, 2015 at in New Delhi, India. The summit has gained recognition and the Inclusive Finance India Report has been quoted extensively in the Malegam Committee, and working report for the Microfinance Bill. The Summit has facilitated discourse on issues like-policy environment, data analytics in financial inclusion, mobile wallets, BC model, customer protection, impact of JAM, and innovations in the sector. I attended the summit as the delegate of ACCESS team.

The Summit began with release of the Sector report 2015 was followed by several sessions on microfinance and financial inclusion in the country. The buzz of the sessions were around Mudra bank, Payment banks, cash less economy and Small Finance Banks. Eight out of 10 Small Finance Banks which have been given in-principle nod by RBI are microfinance institution (MFIs).  Sector experts are hopeful that Small Finance Banks  fill the "missing middle" in reaching the bottom of the pyramid.

India is an interesting scenario as there is rapid updates in telecom infrastructure, IT services and progressive government spending on digital infrastructure. I was really impressed from a particular session  on use of data in digital financial services.  The main issues were  hurdles faced in data sharing and cashless transactions.  Big Data, Small Credit is a good report quoted by a speaker on the impact of the digital revolution on the emerging markets.  I was impressed with a start up company - Lenddo. They use users online social connections to build their creditworthiness and access local financial services. 

Also, one act in a stupid way while confronting a hero. I was glad to have seat next to Prof Malcolm Harper and was literally at the loss of the words required for having a meaningful dialogue. I am already looking forward to next year’s conference with the hope I can attend again. After coming home from the summit  put on by ACCESS, I am feeling renewed, and energized.