USA DRY BEAN COUNCIL

USA DRY BEAN COUNCIL MONTHLY REPORT MAY-2016 PRESENTED TO USDA/FAS FOOD & GRAIN DIVISION 14 th & 15 th INDEPENDENT AVENUE, SW WASHINGTON, DC PREPARED BY SHAKUN DALAL SD CONSULTANTS C-101 SOMVIHAR, SANGAM MARG, RK PURAM, PHONES: 91-98-71222902; 91-11-2618 4324 EMAILS: shakundalal@hotmail.com shakundalal@gmail.com 1

SHAKUN DALAL - SD CONSULTANTS C-101 SOMVIHAR, SANGAM MARG, RK PURAM, NEW-DELHI-110022 TRADE SERVICE WITH INDIAN PULSE TRADE Shakun, kept in touch via emails and phone calls with Indian pulse and Beans trade during the month of May 2016. Four Newsletters were sent in this month on a regular basis to importers, brokers, and wholesalers. Shakun, kept in touch with Indian Pulse trade and IPGA for information on PPQ issues and market intelligence on Indian pulses market. Shakun, also kept in touch with few food manufacturers, retailers, & food service companies via emails. Shakun, travelled to Kolkata during first week of may and met with some of the pulse trade and food processors besides attending a conference arranged by USDA/FAS, US Embassy, Delhi, US Consulate Mumbai and US Consulate Kolkata at American Centre, Kolkata on May 3 rd and 4 th, 2016. MONSOON CAN BOOST CROP-2016-2017 The India Meteorological Department has predicted above-normal rainfall this year in the southwest monsoon season. With rains in the June- September period crucial for kharif crops, a good monsoon will come as a relief to farmers. India s kharif crop is almost completely dependent on rains as there is scarcity of water in most States. Data from the Central Water Commission shows that currently, the total water stored in the 91 key reservoirs (which accounts for over 60 per cent of the total storage capacity of reservoirs in the country) is 34.082 BCM, which is 22 per cent of their live storage capacity and just about 76 per cent of the average storage of last 10 years. Over half of India s gross cropped area (or cultivable land) is dependent on rains and over 70 per cent of the country s annual rainfall is received during the southwest monsoon period starting June and ending in September. Even areas that are irrigated through tanks, canals or wells suffer during periods of low rainfall, as water levels in reservoirs drop and ground water level sinks. Only 35-40 per cent of the cultivable land in the country is under assured irrigation, according to data from the ICRIER, a research organization. The possibility of above normal southwest monsoon for the current year is good news for Kharif crop. For rabi crops such as gram, urad, moong or, say, wheat, the weather conditions post-september will be important. 2

Of India s total food grain output, half comes in kharif and half in the Rabi season. While pulses are grown in Rabi, rice, coarse cereals, oil seeds and cotton are grown mostly in kharif. However, while overall there may be above-normal rainfall, its dispersion in the important food grain producing States, including Punjab, Haryana, Rajasthan, UP, West Bengal, Andhra Pradesh, Karnataka and Maharashtra, will be key to growth in the output of food grains this year. 2015-16: Definitely a lack-luster year The Ministry of Agriculture s estimate for 2015-16 shows the total food grain production (kharif and rabi together) at around 253.16 million MT. This is only marginally higher over the previous year s production of 252.02 million MT. Though poor monsoon rains in the June-September period hit kharif output, the year s total food grain output hasn t been impacted severely as the yield in the Rabi season was good. Data from the Department of Agriculture shows that in 2015-16, while kharif output was 124.24 million MT, lower by 3.8 million MT over the previous year, Rabi output at 128.92 MT was higher by 4.96 million MT over last year. Though some regions in the central parts, such as Vidarbha in Maharashtra, were hit by drought in the Rabi season, the output inched up, thanks to the Centre s supply of drought-resistant crops in some regions. 2016-17: Expected to have a brighter outlook The outlook for 2016-17 is bright given the above normal rainfall forecast by both the IMD and Skymet. So, the output in all kharif crops may be higher this year. Central India and regions in the west coast, which were hit by severe drought last year, are predicted to get good rains. So, the parched fields in the north and central pockets of Maharashtra are likely to get bountiful rains. However, south Peninsula, which saw deficient rains last year, may not receive much rain this year too. Tamil Nadu and south-interior Karnataka may receive fewer rains, says Skymet. Northeast India may also get only moderate rains, says the agency. As the time of onset of the monsoon and its dispersion across States is what will influence sowing patterns, one needs to wait to see how the monsoon pans out. This year s Rabi crop may also be good. After the good rains in the June- September period, the residual moisture in the soil will help Rabi sowing. The Australian Bureau of Meteorology says that there is a 50 per cent chance for La Nina conditions to set in by September, which may also help Rabi crops. 3

PRODUCTION ESTIMATES As per Agriculture Ministry s second estimates, pulses production is estimated at 17.33 million MT in 2015-2016 crop year (July-June), marginally higher than the previous year s production of 17.15 million MT. Source: Economic Times, dated May 31 st, 2016 TARGET FOR KHARIF PULSES THE Agriculture department has chalked out a plan to boost production of pulses in the current kharif season by increasing acreage besides increasing the productivity by increasing the yield per hectare. Source: Indian Express, dated May 31 st, 2016 OVERVIEW OF ONDIA S PULSES SECTOR Table-1: India Pulses production- Estimates for 2015-16 (Unit: Million Tones) Particulars 2014-15 2015-16** Sources Production-all Pulses & Beans 17.15 18.32 DES Total Import-all pulses & Beans 4.58 4.10 DOC Availability-all pulses & Beans 21.73 22.42 -- Total Exports-Only garbanzos 0.22 0.25 DOC Total Availability for Domestic 21.51 22.17 -- Consumption-all pulses & Beans Source: Directorate of Economics and Statistics (DES), Department of Agriculture & Cooperation (DAC) and Department of Commerce (DoC) Availability: Production plus Total Imports; Total Availability for Domestic Consumption: Availability minus Total export. **: For preparation of estimate for 2015-16, production, export and import. Table-2: Trends in Pulses production in India and Minimum Support Prices PRODUCTION IN MILLION MT MINIMUM SUPPORT PRICE INR PER MT Pulses 2013-14 2014-15 2015-16* 2013-14 2014-15 Pigeon Peas 3.17 2.81 2.55 4300 4350 Gram 9.53 7.33 8.09 3100 3175 Mung Beans 1.61 1.50 1.55 4500 4600 Black Matpe 1.70 1.96 1.74 4300 4350 Other Pulses & Beans 3.78 3.55 3.40 2950 3075 Total Pulses 19.78 17.15 17.33 Source of Production: Directorate of Economics and Statistics (DES) *: Based on 2nd Advance Estimates for 2015-16. Source of MSP: Commission for Agricultural Costs and Prices (CACP) 4

TABLE-3 TRENDS INDIA S PULSES EXPORT & IMPORTS (Unit: Thousand MT) Exports from India Pulses 2013-14 2014-15 2015-2016 (April 15- Jan 16) Imports into India HS Code 2013-14 2014-15 2015-16 (April- Jan) 0713100 Peas.85 3.91 5.52 1330.43 1951.97 1984.59 0713200 Chickpeas 333.82 190.23 171.81 276.13 418.87 913.24 0713300 Mung beans 1.66 4.25 5.63 624.12 622.88 504.38 0713400 Lentils 0.73 7.98 3.94 708.71 816.46 1132.95 0713600 Pigeon Peas 0.1 1.22 2.75 465.61 575.22 404.27 Total Pulses 343.5 222.14 196.71 3654.78 4584.84 5130.56 Source: Department of Commerce Note: India exports Garbanzos chickpeas, while imports mainly desi chickpeas. Chickpeas (Garbanzos) are the largest contributor of India s export basket of pulses accounting for about 90 percent of total pulses exports from India. Peas imports account for 40 percent share of total pulses imports into India. Of late, there is a rising trend in Gram imports as well. KEY CHALLENGES 1. Concentrated production areas: Concentrated production in Madhya Pradesh, Rajasthan, Maharashtra and Uttar Pradesh, account for 80 percent Gram & Garbanzo production. Uttar Pradesh, Madhya Pradesh and Bihar account for 80 percent lentils production. Maharashtra, Karnataka, Madhya Pradesh and Andhra Pradesh account for 70 percent of pigeon peas production. 2. Grown predominantly in rain-fed areas: It is estimated that over 70 percent pulses are grown in rain-fed areas in the whole country. 3. Low adaption of high-yield varieties 4. MSP While MSP is declared, there is hardly any procurement operation by government. Only during 2015-16, government has started buying pulses as 5

a part of its initiative to build strategic reserve of 100,000 MT. 5. Investment Investment in processing and infrastructure is limited as bulk of the value is captured in the retail. POSSIBLE SOLUTIONS: 1. Broad-base production geographies 2. Move to cultivation in irrigated conditions using hybrids 3. Integrate small farmers with national markets and ensure fair prices 4. Incentivize modernization of pulses processing CONTINUOUS QUARTERLY INCREASED ANNUALIZED WHOLESALE PRICE: JANUARY 2015-APRIL 2016 Average Volatility so far Maximum Minimum 2015 9.16% 18.40% 2.21% 10.06% 11.34% 37.39% 0.87% 12.29% 13.40% 34.74% 1.33% 14.59% 6.60% 19.27% 1.60% 7.64% 6.60% 12.80% 2.48% 6.68% GOVERNMENTS WANTS PRICE CONTROL ON PULSES The state government announced to introduce price control law for pulses; the government decision comes after pigeon pea s dal rates touched INR 200 a kilogram last year. But pulse traders say it may be difficult to fix the rates especially that of pigeon pea s dal. This is because rates are based on whole pigeon peas, the raw material. Prices of whole pigeon peas are decided in free market with imports also having a major play. The same logic will apply to other pulses too, say traders. Whole pigeon pea price in wholesale markets currently is in the range of INR 88 to 91 per kilogram, where as in retail market pigeon pea s dal is available for INR 130 to 150 per kilogram. Almost half of the pigeon peas consumed in country are imported from Myanmar and other countries, and rates remain fluid and much depends on the price trends in Myanmar where the government does not have any control. According to the trade sources-production of pigeon peas was lower by 300,000 MT compared to the last year. If the price control was imposed in Maharashtra, traders may still have a way out by selling dal to other states. Maharashtra was a major center for pigeon peas supply. Source: Times of India To control the price rise GOI took several measures as listed below: 6

Export of all pulses was banned except Kabuli s and organic pulses up to 10,000 MT. Import of pulses is allowed at zero import duty. India imported around 5.30 million tonnes of pulses for the period of April 2015- Febuary2016. Stock limit on pulses extended till September 2016. Government imported 5,000 MT of pigeon peas from Malawi/Mozambique and allocated it to States for retail sale to consumers to improve availability and to moderate prices. MSP, including bonus was raised for kharif pulses for Pigeon peas, Black Matpe and Mung beans. MSP was also raised for Rabi pulses for Gram and Lentils. Government has approved creation of buffer stock of 150,000 MT of pulses for effective market intervention. Government has decided to immediately release 10,000 MT of pulses from the buffer stock, consisting of 8,000 MT of pigeon peas and 2,000 MT of Black Matpe to States/UTs at subsidized rates for retailing by them at not more than INR 120 per kilograms to improve availability and stabilise prices. Regulatory measures by Securities & Exchange Board of India (SEBI) on Gram contracts including increase in the margin requirement to discourage speculation and to moderate the price volatility in forward market and close monitoring by SEBI. Strict vigilance by Directorate of Revenue Intelligence to prevent importers from misusing the facilities of Customs Bonded Warehouse facility. Setting up of a Group of Officers for regular monitoring and exchange of information on hoarding, cartelization etc. All these above measures have resulted in bringing down the prices initially. At present, due to short/lower stocks at sourcing countries/origins, activity for import consignments have slowed down. Shortages at origin along with increased domestic demand prices for pulses are again ruling high. Lets hope for a bountiful pulses production in India during next year given andabove normal monsoon' forecast from IMD. GOVERNMENT STEPS TO ACHIEVE SELF SUFFICIENY IN PULSES WITH HELP OF ICRISAT & OTHER AGENCIES A roadmap to achieve pulses self-sufficiency for India by increasing 7

production, yield and area under pulses, and by setting up seed hubs and demonstration of best technologies was recently drawn up by the Government of India (GoI) in consultation with national and international research institutes. The government announced the implementation of a Pulses Program, with an outlay of 4.05 billion (US$ 60.44 million), over the next four years to achieve self-sufficiency in pulses. At a recent workshop, detailed plans were developed which include creating 150 seed hubs across the country to produce quality seeds. ICRISAT will be one of the seed hubs. The Indian Council of Agricultural Research (ICAR) will set up these hubs. Funding to strengthen the facilities for seed production, processing and storage will be available along with the provision to establish a revolving fund for operational expenditure. The target set for production is 23.5 million tons by 2020 and 27.5 million tons by 2025, while the target for average yield has been set at 900 kg per ha by 2020 and 1,000 kg per ha by 2025 against the current average yield of 750 kg per ha. The area under pulse crops is targeted to reach 26 million ha by 2020 and 27.5 million ha by 2025 against the current area of 24 million ha. India is the largest producer (18.2 million tons), consumer (over 22 million tons) and importer (3-5 million tons per year) of pulses. The current initiative is an effort to bridge this gap. Plans are in place to conduct 100 clusters of demonstrations on best-bet technologies across the country, with each cluster covering an area of 100 ha. Demonstrations will include crop varieties for all cropping seasons, cropping systems, mechanization, integrated crop management practices, grain processing and storage, value addition, marketing etc., so as to get an idea of the extent of enhancement in production and farmers income possible with available technologies. Dr J S Sandhu, DDG, Crop Science, ICAR, spoke about scaling up seed production and distribution as a key intervention. Mr. SK Pattanayak, Secretary, Agriculture, Cooperation and Farmers Welfare, GoI, emphasized three key areas: seeds of improved varieties, irrigation tailored to pulses (especially micro irrigation), and markets that allow farmers to increase their profitability aligned to improved farmer welfare. These priorities are aligned to the ICRISAT policy brief Towards Self Sufficiency in Pulse Production in India submitted to the Prime Minister s Office (PMO) earlier this year at the request of the PMO. ICRISAT can best support through accelerated seed production of improved varieties, facilitate and model up scaling through existing 8

partnership with key state governments of Andhra Pradesh, Telangana, Karnataka, Odisha and possibly Uttar Pradesh. This will be through our work on the science of delivery and application of business intelligence platforms to coordinate on-the-ground activities and implement key performance indicators to track progress and make course corrections, said Dr David Bergvinson, Director General, ICRISAT. ICRISAT has the additional strength to involve private sector partners to vertically integrate farmers into higher value chains as well as value addition and marketing through Farmer Producer Organizations (FPOs) and associations like Self Employed Women s Association (SEWA). As the state governments will implement the programs, ICRISAT can integrate pulse self-sufficiency targets into the ongoing pulse related work in Andhra Pradesh, Karnataka, Maharashtra and Odisha, he added. High yielding, drought tolerant and disease resistant varieties of chickpea have spurred a post rainy season i.e. rabi revolution in the district of Anantapur, Andhra Pradesh, India. Photo: PS Rao, ICRISAT Dr Bergvinson in his address, emphasized the need for detailed crop-wise implementation plans, based on the production and market demand at the district level. Realization and implementation will require granular work plans with key performance indicators and defined partnerships along the value chain. This will ensure profit for farmers and that targeted production based on market demand is achieved, he said. He also mentioned that convergence of key partners is required for success at scale. Dr Sandhu also reiterated the need for coordination and integration along the value chain. The absence of private sector was noticeable and this is an area where ICRISAT can play a role bringing together public and private sector partners to scale up pulse production. An important takeaway from the Productivity Enhancement session was that many technologies exist but are not adopted due to poor knowledge exchange systems, poor economics and access to inputs. Dr PK Joshi, Director South Asia, International Food Policy Research Institute (IFPRI) said that long and fragmented value chains associated with pulses discourages farmers from cultivating pulses. He suggested that the milkmarketing model, which has been successful in increasing availability of milk in India, might be studied and adopted for pulses. Discussions were also held with Mr. Avinash K Srivastava, Secretary, Ministry of Food Processing Industries, GoI and Mr. Sanjay Lohia, Joint Secretary (Crops), Department of Agriculture, Cooperation and Farmer Welfare (DAC&FW), GoI, and Dr Bergvinson on market integration 9

through the National Agricultural Marketing platform, warehouse receipts to reduce price volatility for farmers and grades and standards that can be automated to improve pricing for farmers and quality for consumers. The two-day workshop Towards Self-sufficiency of Pulses in India was led by the Indian Institute of Pulses Research and organized by the National Academy of Agricultural Sciences (NAAS) on 7-8 April in New Delhi, India. Some of the sessions were: genetic enhancement; productivity enhancement; smart farming; harvest and post-harvest management; trade and policy; new dimensions, etc. The meeting was attended by high-level government officials, NAAS fellows and representatives from the Borlaug Institute for South Asia (BISA), International Center for Agricultural Research in the Dry Areas (ICARDA), Bioversity, IFPRI and ICRISAT. Source: http://www.icrisat.org OTHER FARMER FRIENDLY INITIATIVES BY GOVERNMENT Besides increase in MSP of Kharif crops, Government has taken several farmer friendly initiatives over the last one year. These, amongst other things, include the following: The Government had declared a bonus, over and above the MSP of INR 2,000 per MT for Kharif pulses of 2015-2016 season and a bonus of INR 750 per MT for Rabi pulses of 2016-2017 marketing season. A new crop insurance scheme 'Pradhan Mantri Fasal Bima Yojana" has been launched by the Government. Under this scheme, the premium rates to be paid by farmers are very low 2% of sum insured for all Kharif crops, 1.5% for all Rabi crops and 5% for commercial and horticulture crops. The new insurance scheme involves use of simple and smart technology through phones & remote sensing for quick estimation and early settlement of claims. The Government has also launched a Mobile app "Crop Insurance" which will help farmers to find out complete details about insurance cover available in their area and to calculate the insurance premium for notified crops. The Government has also launched a scheme to develop a pan India electronic trading platform under 'National Agriculture Market' (NAM) scheme with the aim to integrate 585 regulated markets with the common e- market platform by March 2018. The reform will result in three major changes - electronic trading, a single license valid for all States and single entry point market fee. It will also enable farmers to discover better prices for their produce. Soil Health Cards are being issued to farmers across country. The card provides information on fertility status of soil and an advisory on soil test 10

based use of fertilizers. As of 24.05.2016, 189 lakh Soil Cards have been distributed to farmers. Under Paramparagat Krishi Vikas Yojna (PKVY) the Government is promoting organic farming and development of potential market for organic products. The Pradhan Mantri Krishi Sinchai Yojana is being implemented in mission mode. Focus is on targeted competition of irrigation projects lying incomplete for a long period and on increasing water use efficiency by promoting drip and sprinkler irrigation. A dedicated Kisan Channel has been started by the Doordarshan to provide 24 x 7 information in the hands of farmers regarding weather updates, agrimandi data etc. Government is also encouraging formation of Farmer Producer Organisations. To stabilize prices of pulses and onions. Government has decided to create buffer stocks of pulses and has imported pulses and onions under the Price Stabilization Fund. A handbook for women farmers Farm Women Friendly Hand Book containing special provisions and package of assistance which women farmers can claim under various on-going Missions / Submissions / Schemes of department of Agriculture, Cooperation and Farmers Welfare has been brought out. Women farmers / beneficiaries could approach the nearest Project Director (ATMA) / Deputy Director (Agriculture) office at District or Block Technology Manager / Assistant Technology Managers at Block level for instant help and facilitation for availing the benefits. IMPORTANT NEWS IN CONNECTION WITH PULSES 1. PULSES MARKET & PRICES As part of efforts to check rise in pulse prices, India imported 5,1 million MT of pulses valued at $3,690.3 million in April 2015 to February 2016, in just 11 months. The country had imported 4.58 million MT of pulses valued at US$ 2,786.1 million in 2014-15 and 3.64 million MT at US $2,119.3 million in 2013-14. To augment domestic availability and stabilize prices of pulses, the government imported 5,000 MT of pigeon peas through MMTC in 2015-16. For buffer stock of pulses, MMTC has already contracted for import of 13,500 MT of Pigeon peas and 12,500 MT of Black Matpe. Source: Nirmala Sitharaman, Commerce and Industry Minister, written reply to the Rajya Sabha. 2. PRODUCTION OF ALL FOOD GRAINS & PULSES 11

Food grain production in India during 2015-16 was almost stagnant at an estimated 252.23 million tons, compared to previous year s production of 252.02 million tons, as drought and un-seasonal rains affected crops in several States across the country. Rice, pulses, jowar and maize, all suffered a decline, while wheat was higher than last year, according to the third advance estimates brought out by the Agriculture Ministry. Compared to the target of 264 million tons fixed by the Centre for the year, food grain production at the current estimated level will be around 4.5 per cent lower, the official release showed. The Government has pegged pulses output at 17.06 million tons, with Gram production at 7.48 million tons and Pigeon peas at 2.6 million tons. The lower output was largely on account of deficiency in rainfall, which stood at 12 per cent during the year. In 2014-15, the rainfall deficiency stood at 14 per cent. Source: The Hindu Businessline 3. Seed prices slashed to ramp up pulses output In a move to ease the scarcity of pulses and also achieve self-sufficiency, Telangana State government has decided to promote pulses cultivation in a big way in place of cotton and paddy in the ensuing Kharif season, which begins in June in the State. As a first step, the government is making available seeds at affordable prices to the farmers growing Pigeon peas, Gram and Mung beans. Towards this, State Agricultural department on Saturday slashed the seed prices drastically by increasing the subsidy from 33% to 50% per cent. The officials of State Agriculture department said that 2016-17 was declared as International Year of Pulses. Therefore, the subsidized prices would help farmers to shift from traditional cultivation of crops like paddy, cotton to pulses. The department would take up a massive campaign to educate the farming community the advantage of growing pulses, which require less irrigation water and low investments. The government was also contemplating providing pesticides and fertilizers at reasonable prices, the officials said. Source: Times of India 12

SUMMARY: The government is trying seriously to increase the pulses production in the country. Major pulses, which has government on stage one-priority are-pigeon peas, Gram, Black Matpe and Mung Beans. Second stage priority pulses are-lentils, Garbanzos. last number on pulses priority comes for beans-red kidney beans, black eye beans and other type of beans. WHOLESALE MARKET SCENARIO Price wise beans prices were found stable as lat month and not much change has happened. 13