Price-sensitive farmers replacing pulses with cotton

Pulses output was estimated at record 22.4 mt in the 2016-17 crop year ending on June

Early onset of the monsoon and its progress has led to an increase in the area sown till Friday of this kharif season, year-on-year. Alongside, the depressed price of pulses have led more farmers to replace it with cotton in some parts.

Farmers have brought almost 10% more area under cultivation over the corresponding period of the previous kharif season, despite the current unrest in the community.

The Southwest monsoon advanced further into the central portion of Maharashtra, Vidarbha, more parts of Chhattisgarh, most of Odisha, West Bengal, Jharkhand and Bihar this week, according to India Meteorological Department. Showers remain deficient in the central part of India, including in Madhya Pradesh.

The area sown with pulses had declined 35% by Friday of this kharif season over the corresponding period last year. Pulses and related products saw a price fall of 19.5% in May, in terms of the consumer price index.

A higher minimum support price (MSP) announced by the government for various pulses hasn't sufficed for more sowing. The MSP of tur, also called arhar (red gram), was raised for instance by Rs 400 a quintal to Rs 5,450 a quintal, including bonus, in 2017-18 from that in 2016-17.

Pulses output was estimated at record 22.4 million tonnes in the 2016-17 crop year ending June, as against 16.35 mt in 2015-16.

"Remunerative prices are necessary to sustain farmers' interest in growing such crops. The recent dip in prices might dissuade widespread sowing of such crops in the kharif season," said Aditi Nayar, principal economist at ratings agency ICRA.
 

However, the area under cultivation for cotton rose by almost 30% in this period. The government had raised the MSP, by Rs 160 a quintal to Rs 4,020 a quintal for medium staple cotton, and to Rs 4,320 a quintal for long staple.

What has surprised experts is an increase in the area under oilseeds by 55%, year-on-year, in this early part of the kharif season; oil prices have been dull. Inflation in oil and fats fell to 2.7% in May from 3.14% in April.

The area under cultivation for rice and sugarcane rose by 5 and 6%, respectively, in this period, primarily because the monsoon has been good in paddy growing areas of Punjab and Bengal, and in the sugarcane-cultivating areas of Uttar Pradesh, Maharashtra and Karnataka.