October 18, 2015
Abstract: Supply and demand imbalances that lead to price spikes in tur dal, an important source of protein in the Indian diet, have been analysed. Since supply disruptions are the primary driver of price spikes, three long-term structural solutions have been presented, as enumerated below:
- Enter into long-term supply contracts with land-abundant countries in Africa or Australia to guarantee a year-round minimum volume.
- Improve long-term yield productivity of tur through addressing not only cultivation efficiency, but also storability and shelf-life. In the late 1980s, overall yields increased steadily after a technology mission for pulses was set up. A similar new mission could be set up again.
- Create a well-functioning futures market to warn the government about impending supply disruption, so that the government can take remedial action.
Keywords: food inflation; food policy; price policy; macroeconomic policy