Months after heavy financial damage was inflicted on tur/arhar (pigeon pea) growers following a collapse in farm-gate prices below the minimum support price, New Delhi has begun to take cognisance of the problem.

Import of tur/arhar has been shifted to the restricted category with a ceiling of two lakh tonnes. Quotas will be issued. Government import commitments under bilateral agreements/ an MoU (with Mozambique) are exempt though. But a lot more needs to be done.

It is important that imports are well regulated. There is already a large inventory within the country with government agencies and the private sector. Moreover, the next harvest of pigeon pea is only 4-6 weeks away. As of August 2, tur/arhar has been planted on 37.5 lakh hectares, down from 45.2 lakh ha this time last year.

The acreage decline is pronounced in Maharashtra and Karnataka, where growers have been rather upset with low prices and inadequate procurement support. The acreage estimate is a clear indication of the mood of the growers.

The Agriculture Ministry’s production target of 42.5 lakh tonnes of tur/arhar for 2017-18 is unlikely to be achieved. In 2016-17, the actual harvest was an estimated 46 lakh tonnes. Yet, the market is unlikely to face any shortage given the high level of existing stocks.

Conditions are now developing for a healthy increase in the price of tur/arhar that should bring some relief to growers. From the recent levels of ₹3,500 a quintal, prices could improve by 15-20 per cent and rise to more than ₹4,000 a quintal yet remain well below the minimum support price of ₹5,450 a quintal for kharif 2017-18.

Having fixed the MSP at a high level, the policy makers are duty bound to ensure that growers receive the minimum price. For this purpose, procurement operations have to be strengthened. Government agencies should get into a state of readiness right away. Inventory building by the private sector should be encouraged too. The target should be to procure at least 10 lakh tonnes of tur/arhar so that growers do not feel shortchanged this season too.

There are other measures as well to support growers and consumers. Ideally, the government should allow only actual users such as dal mills and food processing companies to import tur/arhar under the quota system. This will ensure a steady flow of imports, utilisation of processing capacity and ready marketing of dal. It will reduce, if not eliminate, speculation.

In major origins such as Myanmar and East Africa, pigeon pea is currently quoted at prices as low as $500 a tonne. The landed cost of imported pulses will be far below the MSP fixed by the government for domestic growers. From that perspective, quantitative restriction on import of tur/arhar is a welcome step. The duty of 10 per cent on tur/arhar import imposed a few months ago has proved ineffective in the context of agreements with supplying countries such as Myanmar.

It may also be time for the Commerce Ministry to open up pulse exports, including pigeon pea. Indian tur/arhar may not be price-competitive given the strong rupee and low overseas rates. Yet, it will exert a sentimental effect on the domestic market.

Keeping the import and export policy for pulses open, and strict monitoring and regulation of foreign trade is the way forward.

The writer is global agribusiness and commodities market specialist. Views are personal