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Buffer Stock Norms of Pulses

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Buffer Stock Norms of Pulses
Content
S.l. Section Page no.
1 Background 1-2
2 Production and supply of pulses 2-4
3 Demand of pulses 5
4 Trends in prices of pulses 5-8
4.1 Trends in wholesale prices of pulses 5-7
4.2 Trends in retail prices of pulses 7-8
5 Estimation of buffer stock norms for pulses 8-11
6 Projected buffer stock norms upto 2022 11
7 Conclusions and recommendations 12-13

List of Tables
Table
no.
Title Page
no.
1 Deviation in pulses production from trend (1996-97 to 2016-17) 4
2 Supply of pulses in India 4
3 Average inflation and instability in wholesale prices during March 2004
to March 2017
6
4 Positive and negative deviation from predicted production at different
insulation levels during 1996-97 to 2016-17
9
5 Role of import and buffer stock to meet supply stabilisation of pulses,
base 2016-17
10
6 Composition of buffer stock at different levels of insulation 11
7 Projected buffer stock norms for the period 2017-18 to 2021-22 11

List of Figures
Figure
no.
Title Page
no.
1 Trends in actual and normal production 3
2 Trends in wholesale prices of pulses 6
3 Trends in retail prices of pulses 7-8

List of Appendices
Appendix
no.
Title Page
no.
1 Deviation of actual production from predicted production in Total Pulses 14
2 Deviation of actual production from predicted production in Arhar 15
3 Deviation of actual production from predicted production in Gram 16
4 Deviation of actual production from predicted production in Urd 17
5 Deviation of actual production from predicted production in Moong 18
6 Deviation of actual production from predicted production in Lentil 19
7 Deviation of actual production from predicted production in Other Pulses 20
8 Negative deviation from normal production at different insulation levels 21 1

1. Background
1.1. A meeting was held in Prime Minister‟s Office (PMO) on 16.09.2017 to review the
progress of disposal of pulses. In the meeting, it was decided to constitute a committee
under the Chairmanship of Prof. Ramesh Chand, Member, NITI Aayog, to deliberate
and recommend the level of pulses buffer to be maintained by Government of India. The
terms of reference (ToR) of the committee are :
a) The committee would recommend the level of buffer stock of Pulses to be maintained,
and
b) The committee would suitably review, adjust and modify this level every year to suit
the overall production, disposal, prices, and other such considerations as deemed
appropriate.
1.2 Pulses play an important role in sustaining food and nutritional security as well as
environmental sustainability in India. These crops provide quality and cheap protein to
humans, improve fertility and physical structure of soil, and can be cultivated even under
stress conditions with minimum use of resources. India is the world‟s largest producer
and consumer of pulses constituting 23 per cent and 30 per cent share in total pulses
production and consumption in the World, respectively(FAO, 2013).Since the beginning
of green revolution production performance of pulses has lagged behind other staple
crops except in the recent years. Between 1950-51 and 2015-16, production of pulses
could increase only by 95.6 per cent as compared to 455 per cent increase in cereals
production and 390 per cent increase in oilseeds production in the country. During the
same period population grew at faster rate than the rate of increase in pulses production.
Consequently, the per capita availability of pulses declined from 60.54 grams in 1950-51
to 43.83 grams in 2015-16 against the minimum requirement (based on ICMR norms for
sedentary activity) of 68.49 grams. Further, slow growth in production of pulses is
accompanied by wide regional variations, temporal fluctuations and unfavourable
revenue terms of trade with fine cereals and oilseeds (Srivastava et al. 2010)
1
.The poor
production performance of pulses coupled with lack of assured market creates imbalance
in demand and supply, and results in soaring import bills and unpredictable changes in
prices.
1.3. The rise in pulses prices in the situation of lower production adversely affects
consumption with negative consequences on nutritional security in the country. On the
other hand, fall in prices during the period of bumper production (as happened in 2017)
affects income of the pulses growing farmers. It is, therefore, necessary to maintain
some stability in prices. There are two options to stabilise domestic supply and prices
viz. buffer stock and export/import of pulses. Buffer stock involves procurement by
public agencies when production is above normal and release of procured quantity when
there is shortage.

1
Srivastava, S.K., N. Sivaramane, and V.C. Mathur (2010), “Diagnosis of Pulses Performance in India”,
Agricultural Economics Research Review, Vol. 23, No.1, pp. 137-148. 2

1.4 The report is divided into the following sections. Second section discusses production
and supply of pulses. Third section deals with demand for pulses in the country. The
trends in wholesale and retail prices are discussed in the fourth section. Fifth section
provides estimates on buffer stock norms for pulses in the country.
2. Production and supply of pulses
2.1. India produced 22.9 million tonnes (mt) of pulses during 2016-17 which constitutes
about 6 per cent of total crop output in value terms. The production basket of pulses
comprised of gram, arhar, urd, moong, lentil, and other minor pulses with their respective
share of 42 per cent, 18 per cent, 12 per cent, 9 per cent, 5 per cent and 13 per cent in
total pulses production. The top pulses producing states in the country are Madhya
Pradesh, Rajasthan, Maharashtra, Karnataka, Andhra Pradesh and Uttar Pradesh. These
six states produced 75 per cent of the total pulses in the country in year 2015-16.
2.2. The production performance of the pulses during the past two decades (since 1996-97)
revealed that the production grew at annual rate of 0.71 per cent till the year 2009-10 and
hovered around the level of 14 mt.In the subsequent period between 2009-10 and 2016-
17, growth in pulses production accelerated to 3.2 per cent and production reached
historically highest level of 22.9 mt in the year 2016-17.In India, pulses are cultivated
primarily under rainfed conditions (only 19.7 per cent irrigation coverage) and on
marginal or relatively poor soils with minimum use of resources. Consequently,
production exhibits wide fluctuations, which is reflected from the deviation in production
from the underlying trend (see Figure 1 for individual pulses and total pulses).
2.3. During 11 out of the past 20 years, pulses production remained below the average level
of 15.24 mt (Figure 1 and Table 1). The average negative deviation from the trend was
14.19 lakh tonnes which is 9.3 per cent of the average production (1996-2017) in the
country. The extreme negative deviation has been observed for the year 2002-03 when
pulses production fell 20 per cent (27 lakh tonnes) below the estimated normal
production (of this year). At the same time, pulses production was 22 per cent (41 lakh
tonnes) higher than the estimated normal production in the year 2016-17. Among the
individual crops, average negative deviation varied from 6.8 per cent in lentil to 17 per
cent in moong with extreme negative deviation upto 50 per cent (in 2009-10) for
moong. The extreme positive deviation varied from 15 per cent in lentil (in 1999-00) to
49 per cent (in 2016-17) in arhar. The large inter-year variation in production disrupts
demand and supply equilibrium and results in unpredictable changes in prices with
definite consequences for food and nutritional security in the nation.
3




Figure 1. Trends in actual and normal production





0
1000
2000
3000
4000
5000
6000
Production (000 tonnes)

Arhar
Actual production
Predicted production (linear)
0
2000
4000
6000
8000
10000
12000
Production (000 tonnes)

Gram
Actual production
Predicted production (linear)
0
500
1000
1500
2000
2500
3000
Production (000 tonnes)

Urd
Actual production
Predicted production (linear)
0
500
1000
1500
2000
2500
Production (000 tonnes)

Moong
Actual production
Predicted production (linear)
0
200
400
600
800
1000
1200
Production (000 tonnes)

Lentil
Actual production
Predicted production (linear)
0
5000
10000
15000
20000
25000
Production (000 tonnes)

Total Pulses
Actual production
Predicted production (linear) 4

Table 1. Deviation (000 tonne) in pulses production from trend (1996-97 to 2016-17)
Particulars Arhar Gram Urd Moong Lentil Total
Average negative deviation
(% of normal production)
-278
(10.4%)
-795
(12%)
-207
(13%)
-223
(17%)
-66
(6.8%)
-1419
(9.3%)
Average positive deviation
(% of normal production)
452
(17.0%)
875
(13%)
155
(10%)
245
(19%)
54
(5.6%)
1561
(10.2%)
Normal production 2668 6600 1570 1292 970 15238
Highest –ve deviation
(% of normal in respective
year)
-593
(19%:
2015-16)
-1602
(29%:
2000-01)
-481
(29%:
2008-09)
-699
(50%:
2009-10)
-167
(17%:
2007-08)
-2703
(20%:
2002-03)
Highest +ve deviation
(% of normal in respective
year)
1572
(49%:
2016-17)
1724
(34%:
1998-99)
802
(40%:
2016-17)
535
(33%:
2016-17)
146
(15%:
1999-00)
4187
(22%:
2016-17)

2.4. India is the world‟s largest producer of pulses. Although the production of pulses is
increasing, its level remained insufficient to meet the growing demand. The deficit
between domestic demand and production is, therefore, met through the import. During
the past two decades, import of pulses has increased from less than one million tonnes
during biennium ending (BE) 1996-97 to 6.66 million tonnes in 2016-17. The increase
in pulses import is largely accounted by yellow pea which constituted 41 per cent share
in total pulses import during quinquennial ending (QE) 2016-17. Yellow pea was
followed by lentil and chickpea with the respective share of 17 per cent and 14 per cent.
The major pulses supplying countries are Canada, Australia, Russia and Myanmar.
Nevertheless, India also exports small amount of pulses, particularly chickpea to
countries like Pakistan, Sri Lanka, USA, etc. The net availability of pulses in the
country increased from 14.79 mt in BE1996-97 to 29.48 mt in 2016-17. During the
recent years, the per capita availability of pulses hovered around 17 kg/capita/year,
except in the year 2016-17 when bumper production as well as increase in import
significantly raised pulses supply in the country. India‟s dependence on import (share
of import in total availability) of pulses has increased from 4.7 per cent during
biennium ending (BE) 1996-97 to 22.6 per cent in 2016-17.
Table 2.Supply of pulses in India
Year Production
(mt)
Import
(mt)
Export
(mt)
Total
availability
(mt)
Per capita
availability
(kg/year/capita)
Import
dependence
(%)
BE1996-97 14.15 0.69 0.06 14.79 16 4.7
BE2006-07 13.79 2.18 0.35 15.62 14 14.0
2013-14 19.26 3.66 0.35 22.57 18 16.2
2014-15 17.15 4.64 0.22 21.57 17 21.5
2015-16 16.35 5.88 0.26 21.97 17 26.8
2016-17 22.95 6.66 0.14 29.48 23 22.6

5

3. Demand of pulses
3.1. Pulses are an important constituent of Indian food basket. The latest available data from
consumption Expenditure Survey (2011-12) of National Sample Survey office (NSSO)
revealed that an average Indian spends 6 per cent of the total food expenditure on pulses
which supplies 11 per cent of the total protein intake. Between 2004-05 and 2011-12, per
capita household consumption of pulses has increased from 0.705 kg to 0.783 kg in rural
areas and 0.824 kg to 0.901 kg in urban areas. A working group on Crop husbandry,
agricultural input demand and supply projections set up by NITI Aayog estimated that
by the year 2021-22, pulses demand (both direct and indirect) in the country would be
26.72 million tonnes, and there would be a deficit of around 5 to 7 million tonnes in the
country. Any shortfall in production is reflected through the unpredicted changes in
prices.
3.2. The pulses consumption is price sensitive. Kumar (2017)
2
has estimated that price
elasticity of pulses varies from -0.699 for poor households to -0.349 for high income
households with the average value of -0.456. This indicates that in the situation of price
rise, pulses consumption would decline and relatively poor households will be adversely
affected. Therefore, controlling prices of pulses within a fair range is warranted for
addressing the issues of nutritional security.
4. Trends in prices of pulses
The impact of imbalance between demand and supply of pulses is reflected through the
volatility in wholesale and retail prices.
4.1 Trends in wholesale prices of pulses
4.1.1. Figure 2 depicts the trends in wholesale prices of pulses and its comparison with the
cereals pricesduring March 2004 to March 2017. The inflation rate based on the
wholesale prices of pulses and cereals was almost at about 9 per cent level during
March 2004 to March 2014 (Table 3). In the subsequent period till March 2017,
inflation rate in pulses rose significantly to 20.1 per cent, whereas cereals witnessed
deceleration in inflation rate to 4.5 per cent. The increase in prices during the recent
years (March 2014 to March 2017) was registered across all the pulses crops except
moong. Nevertheless the past few months have witnessed downward trend in prices of
pulses.




2
Kumar, P. (2017), “Food and nutrition security in India: The way forward”, Agricultural Economics Research
Review, Vol. (30), No.1, pp. 1-21. 6

Table 3. Average inflation and instability in wholesale prices during March 2004 to
March 2017
Period Cereals Pulses Arhar Gram Urd Moong Lentil
Average inflation (year-on-year)
March 2004 to March 2014 8.6 9.2 9.6 9.6 11.4 13.2 9.7
March 2014 to March 2017 4.5 20.1 19.2 26.0 29.1 6.6 13.8
Instability Index (%)
March 2004 to March 2014 1.33 2.68 3.68 3.48 3.81 3.59 3.18
March 2014 to March 2017 0.68 4.95 5.33 7.10 5.39 3.77 3.73
Figure 2.Trends in wholesale prices of pulses
0
100
200
300
400
500
600
Jan-04 Oct-04
Jul-05
Apr-06 Jan-07 Oct-07
Jul-08
Apr-09 Jan-10 Oct-10
Jul-11
Apr-12 Jan-13 Oct-13
Jul-14
Apr-15 Jan-16 Oct-16
Cereals
Pulses
WPI
(2004
-
05=100)

0
100
200
300
400
500
600
Jun-04
Mar-05 Dec-05 Sep-06 Jun-07
Mar-08 Dec-08 Sep-09 Jun-10
Mar-11 Dec-11 Sep-12 Jun-13
Mar-14 Dec-14 Sep-15 Jun-16
Mar-17
WPI (2004
-
05=100)

Arhar
0
100
200
300
400
500
600
Jun-04
Mar-05 Dec-05 Sep-06 Jun-07
Mar-08 Dec-08 Sep-09 Jun-10
Mar-11 Dec-11 Sep-12 Jun-13
Mar-14 Dec-14 Sep-15 Jun-16
Mar-17
WPI (2004
-
05=100)

Gram
0
100
200
300
400
500
600
Jun-04
Mar-05 Dec-05 Sep-06 Jun-07
Mar-08 Dec-08 Sep-09 Jun-10
Mar-11 Dec-11 Sep-12 Jun-13
Mar-14 Dec-14 Sep-15 Jun-16
Mar-17
WPI (2004
-
05=100)

Urad
0
100
200
300
400
500
600
Jun-04
Mar-05 Dec-05 Sep-06 Jun-07
Mar-08 Dec-08 Sep-09 Jun-10
Mar-11 Dec-11 Sep-12 Jun-13
Mar-14 Dec-14 Sep-15 Jun-16
Mar-17
WPI (2004
-
05=100)

Moong
0
100
200
300
400
500
600
Jun-04
Mar-05 Dec-05 Sep-06 Jun-07
Mar-08 Dec-08 Sep-09 Jun-10
Mar-11 Dec-11 Sep-12 Jun-13
Mar-14 Dec-14 Sep-15 Jun-16
Mar-17
WPI (2004
-
05=100)

Lentil 7

4.1.2. The estimated instability indices indicate that rising trends in wholesale prices
accompanied increasing instability across all the pulses crops during March 2014 to
March 2017 as compared to the preceding period during March 2004 to march 2014
(Table 3). The relativelyhigher fluctuation in prices makes cultivation of pulses a
riskier proposition as compared to the cereals and affects farmers‟ decision to grow
pulses as a main crop.The cultivation of pulses under marginal conditions results in
instability in production and farmer remains stranded in the vicious cycle of instable
production- fluctuating prices-poor production environment-instable production.
Regulating supply of pulses (through buffer stock) would go a long way in controlling
prices within a fair range and signalling the farmers to cultivate pulses with improved
practices.
4.2 Trends in retail prices of pulses

4.2.1.The underlying trends in wholesale prices gets transmitted to retail level with the
predictable consequences on the consumption. The trends in retail prices of major
pulses are presented in the Figure 3. The estimated retail price indices indicate the
consistent rise in retail prices of pulses with varying rate across different pulses. The
retails prices of most of the pulses were at peak level during the year 2016 which
afterwards moved to downward side. The consistent rise in prices erodes affordability
of consumers. Poor households who exhibit higher sensitivity to prices (higher price
elasticity) are adversely affected by the price rise. As pulses demandis fairly stable in
short run, the changes in prices are primarily driven by supply side factors.

0
100
200
300
400
500
600
Jan-04
Nov-04 Sep-05
Jul-06
May-07 Mar-08
Jan-09
Nov-09 Sep-10
Jul-11
May-12 Mar-13
Jan-14
Nov-14 Sep-15
Jul-16
May-17
Retail price index (2004=100)

Arhar
0
100
200
300
400
500
600
Jan-04 Oct-04
Jul-05
Apr-06 Jan-07 Oct-07
Jul-08
Apr-09 Jan-10 Oct-10
Jul-11
Apr-12 Jan-13 Oct-13
Jul-14
Apr-15 Jan-16 Oct-16
Jul-17
Retail price index (2004=100)

Gram
0
50
100
150
200
250
300
350
400
Jan-04
Nov-04 Sep-05
Jul-06
May-07 Mar-08
Jan-09
Nov-09 Sep-10
Jul-11
May-12 Mar-13
Jan-14
Nov-14 Sep-15
Jul-16
May-17
Retail price index (2006=100)

Urd
0
50
100
150
200
250
Jan-04 Oct-04
Jul-05
Apr-06 Jan-07 Oct-07
Jul-08
Apr-09 Jan-10 Oct-10
Jul-11
Apr-12 Jan-13 Oct-13
Jul-14
Apr-15 Jan-16 Oct-16
Jul-17
Retail price index (2006
-
100)

Moong 8


Figure 3.Trends in retail prices of pulses
5. Estimation of buffer stock norms for pulses
5.1. The primary purpose of maintaining buffer stock is to reduce sharp fluctuations in price
of pulses and keeping prices in a fair range which is beneficial both for the farmers as
well as for the consumers. The stock is built by procuring certain quantity of pulses
from the domestic market during the period of high production or by importing and
releasing during the period of deficit supply.
5.2. In the present context, buffer stock norm has been estimated based on the negative
deviation of actual production from the normal (predicted from trend line) production at
different levels of insulation during the reference period 1996-97 to 2016-17. The level
of insulation is understood as the per cent of cases out of the number of years
witnessing negative deviation in which buffer stock will augment domestic supply to
make up for the fall in production. For instance, during the past 21 years, 11 years have
witnessed negative deviation from the predicted production and the extent of deviation
was highest (27.03 lakh tonnes) in the year 2002-03 (Appendix 1). Therefore, in order
to provide a complete (100 per cent cases) insulation to the shortfall from the normal
production, total quantity of 27.03 lakh tonnes is needed. If this shortfall is to be met
entirely from domestic sources then buffer stock of 27.03 lakh tonne will be required
(Table 4). Similarly, to cover the next insulation level of 91 per cent (10 out of 11 years
witnessing negative deviation), 20.62 lakh tonnes buffer stock is required. The stock
requirement for total pulses at different levels of insulation is presented in Table 4.
5.3. Buffer stock and trade are the two sources of stabilisation in supply and prices. Further,
buffer stock can be built through procurement of domestic production and/or imports.
Procurement from domestic market can be taken up during the years of higher
production over the estimated normal level. The analysis reveals that extreme values of
positive deviation in production were larger than extreme values of negative deviation
in fifty per cent cases (Table 4). This implies that domestic market offers sufficient
quantity to build the required buffer stock while the level of buffer stock would depend
on level of insulation desired by the government. For instance, to provide 90 per cent
level of insulation, buffer stock of 20.62 lakh tonnes can be built from the domestic
0
50
100
150
200
250
300
Jan-04 Oct-04
Jul-05
Apr-06 Jan-07 Oct-07
Jul-08
Apr-09 Jan-10 Oct-10
Jul-11
Apr-12 Jan-13 Oct-13
Jul-14
Apr-15 Jan-16 Oct-16
Jul-17
Retail price index (2006=100)

Lentil 9

market during the year witnessing excess production. The evidences show that positive
deviation crossed this level (20.62 lakh tonnes) during 30 per cent cases out of years of
excess production. Assuming self-life of storage of pulses as two years, about 10 lakh
tonnes of pulses can be released every year to the places of deficit supply/requirement
and stock can be topped up with the fresh procurement from the places of excess
production. In a few cases, possibilities of maintaining buffer stock through import can
also be explored in the backdrop of higher demand over domestic production.
Table 4. Positive and negative deviation from predicted production at different
insulation levels during 1996-97 to 2016-17
Negative deviation from trend line Positive deviation from trend line
Insulation
level
Stabilisation
stock needed

000 tonnes
Year of
occurrence
Incidence of
occurrence
(%)
Procurement
potential
000 tonnes
Year of
occurrence
100 -2703 2002-03 10 4187 2016-17
91 -2062 2015-16 20 2489 1998-99
82 -2047 2000-01 30 2435 1996-97
73 -1634 2009-10 40 1593 2010-11
64 -1501 2005-06 50 1550 2013-14
55 -1403 2004-05 60 990 2012-13
45 -1377 2008-09 70 905 1997-98
36 -1040 2006-07 80 725 2003-04
27 -906 2014-15 90 648 1999-00
18 -829 2007-08 100 88 2011-12
9 -107 2001-02 - - -

5.4. During 1996-97 to 2016-17, average annual import of pulses in the country was 26.55
lakh tonnes which is 17.42 per cent of the average annual pulses production of 152.38
lakh tonnes during the same period. Past data shows that imports increased above the
trend (normal level) in the event of fall in domestic production of pulses, and thus met a
part of the shortfall. The average positive deviation in pulses import during the past two
decades is estimated at 5.64 lakh tonnes. This quantity can be termed as „imports
meeting the stability requirement like buffer stock‟. Thus role of buffer stock in
maintaining price and supply stability is met to some extent by the increase in imports.
As import is an important component of pulses supply, buffer stock can be augmented
upto 5 lakh tonnes from increase in import above regular imports.
5.5. As discussed above it is possible to meet shortfall in domestic production to some extent
by raising import above regular level. Import trend shows on an average, import
exceeded trend by 5.64 lakh tonnes which implies that import can be raised to meet a
part of increased shortfall in the domestic production from normal. Thus, buffer stock
norms for pulses have been worked out by adjusting stabilisation quantity with positive
deviation in import from trend import. Distribution of supply shortfall that needs to met
using buffer stock and increase in import is shown in Table 5 for various levels of
insulation. Possibility of meeting domestic shortfall arising out of production shortfall 10

through increase in import over the trend is kept at 564 thousand tonne. Accordingly, the
remaining stability in supply has to be addressed through buffer stock. For perfect
stabilisation India need total quantity of 2.7 million tonne. Out of this 0.564 million
tonne can be met by higher import and remaining 2.1 million tonne need to be met
through buffer stock. The stabilisation requirement change sharply at next level of
stabilisation. India can maintain stability in domestic price in 91 per cent cases by
maintaining buffer stock of 1.5 million tonne.
Table 5. Role of import and buffer stock to meet supply stabilisation of pulses, base
2016-17
000 tonnes
Insulation
level
Quantity
needed for
stabilisation

Stabilisation
quantity share in
predicted
production in
2016-17 (%)
Quantity
available from
increase in
import for
stabilisation
Buffer stock
required for
stabilisation
a b C D e
(e=b-d if b≥ d
else e=0 if b<d)
100 2703 14.4 564 2139
91 2062 11.0 564 1498
82 2047 10.9 564 1483
73 1634 8.7 564 1070
64 1501 8.0 564 937
55 1403 7.5 564 839
45 1377 7.3 564 813
36 1040 5.5 564 476
27 906 4.8 564 342
18 829 4.4 564 265
9 107 0.6 564 0*
* At 9 per cent level of insulation, positive deviation from import fully covers quantity needed for stabilization
5.6. The composition of buffer stock of pulses assumes a significant importance while
deciding about procurement and other logistic requirements. To estimate composition
of buffer stock of pulses above mentioned exercise of estimating stock at different
insulation levels was repeated for individual pulses namely, arhar, gram, black gram,
green gram, lentil and other pulses (Appendix 2 to Appendix 7). Composition of buffer
stock was arrived at by estimating share of individual pulses in aggregated negative
deviation at different levels of insulation. The shares of individual pulses were also
adjusted with the share of respective pulses in total pulses imported during the past five
years (2012-13 to 2016-17). The share of individual pulses in aggregate buffer stock of
all pulses at different levels of insulation is presented in table 6.

11

Table 6. Composition of quantity needed to maintain stability in domestic supply at
different levels of insulation
Insulation
level
Buffer stock
required for
stabilisation
(000, tonnes)
Share of individual pulses (%)
Arhar Gram Urd Moong Lentil Others
100 2139 18 24 16 20 5 17
91 1498 19 30 19 12 4 16
82 1483 19 32 16 16 4 13
73 1070 22 33 12 18 3 12
64 937 24 29 13 20 3 10
55 839 25 34 15 15 4 7
45 813 27 35 13 15 3 7
36 476 45 26 3 11 4 11
27 342 46 29 2 12 4 7
18 265 49 29 0 13 0 9
Note: Level of insulation pertains to total pulses. For individual pulses, level of insulation would vary due to
variation in extent and magnitude of negative deviation.
6. Projected buffer stock norms upto 2022
6.1 Quantity required for stabilisation will increase over time as domestic production and
demand are moving on a rising trend. Buffer stock norms for various level of insulation
against fluctuations in domestic production during 2017-18 to 2021-22 are presented in
Table 7. In order to deal with any level of fluctuations the country requires total
stabilisation produce of 2.75 million tonne in 2017-18 which rises to 2.96 million tonne
by the year 2021-22. The buffer stock requirement works out to be 2.19 million tonne in
year 2017-18 which rises to 2.4 mt by 2021-22 at 100 per cent level of insulation. In
order to achieve 91per cent level of insulation, the stabilisation quantity is estimated to
be 2.10 million tonnes for the year 2017-18 and 2.26 million tonnes for the year 2021-
22. The buffer stock norm for 91 per cent insulation is estimated to be 1.5 million tonne
during 2017-18 which increase to 1.7 million tonne by the year 2021-22.
Table 7. Projected buffer stock norms for the period 2017-18 to 2021-22, base 2016-17
000 tonnes
Insulation
level
2016-17
(base)
2017-18 2018-19 2019-20 2020-21 2021-22
100 2139 2190 2240 2291 2342 2393
91 1498 1537 1576 1615 1653 1692
82 1483 1521 1560 1598 1637 1675
73 1070 1100 1131 1162 1192 1223
64 937 965 993 1022 1050 1078
55 839 865 892 918 944 971
45 813 839 865 891 916 942
36 476 496 515 535 554 574
27 342 359 376 393 410 427
18 265 281 296 312 327 343
12

7. Conclusions and Recommendations
7.1. Pulses production in India faces sharp year to year fluctuations causing violent price
spikes and price crashes. Domestic trade has completely failed to address the issue of
price stability and rather found to indulge in profiteering in such situations. India is
regular importer of pulses while at the same time exporting small quantity of some
pulses. Trade trend in pulses shows that imports generally meet regular shortfall between
domestic consumption and production but could not address adequately the shortfall
resulting from year to year fluctuations in domestic production. Thus the price shocks
caused by shocks in domestic production need to be met by building buffer stock as done
in the case of cereals.
7.2. Presently, country follows ad hoc policy of procurement of excess production for price
stabilisation. Some procurement is also made to address price rise and concerns of
consumers. As the need for maintaining stability in prices of pulses is rising there is a
need for scientific basis for deciding reasonable level of stock to be used as a buffer for
price stabilisation.
7.3. No country follows policy of complete or 100% stabilisation through buffer stock. As the
level of stabilisation is raised the cost of stabilisation becomes higher. Therefore, it is
suggested that India should go for the second highest level of stability instead of 100%
stability. This implies that the proposed buffer stock are adequate to stabilise supply and
prices in 91 per cent of the cases when domestic production falls short of normal
production. It is important to mention that this level of insulation will be adequate for
supply stability in 19 out of twenty years. Probability of production deviation from trend
reveals that the need to have higher than 91% insulation will arise only once in 20 years
and this raises buffer stock requirement by 31 per cent which is quite high. As such
events are rare, they can be addressed through other means.
7.4. Trend in pulses production during the last 20 years show highest negative deviation of
2.70 million tonne which happened during the year 2002-03. The second highest
deviation was 2.06 million tonne which corresponds to 11 per cent of normal production
in the country for the year 2016-17.
7.5. The committee recommends that the country should target an arrangement for 2.06
million tonne of supply to address fluctuation in domestic production. Out of this 27.4
per cent (5.64 lakh tonnes) can be arranged by increase in imports and remaining 72.6
per cent need to be met by maintaining buffer stock build on procurement during above
normal production.
7.6 The level of buffer stock of pulses to be maintained in the country for supply stabilisation
during the next five years is estimated as under:
2017-18: 15.37 lakh tonne
2018-19: 15.76 Lakh tonne 13

2019-20: 16.15 lakh tonne
2020-21: 16.53 lakh tonne
2021-22: 16.92 lakh tonne
7.7 Major pulses produced in India include gram, arhar, urd, moong and lentil. These crops
covered 85.9 per cent of pulses production in the country during biennium ending 2015-
16. Pulses are the important source of protein for Indian and they are consumed as a
general pulses and as a specific pulses. It is very difficult to estimate the extent of
substitution among various pulses and demand for specific purpose pulses. Composition
of buffer stock was estimated assuming some substitution among pulses and based on
their share in aggregated estimated stock. The buffer stock should consist of gram, arhar,
urd, moong, lentil and other pulses with their respective share of 30, 19, 19, 12, 4 and 16
per cent.


14

APPENDIX
Appendix 1. Deviation of actual production from predicted production in total pulses
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 14148 11713 2435
1997-98 12971 12065 905
1998-99 14907 12418 2489
1999-00 13418 12770 648
2000-01 11075 13123 -2047
2001-02 13368 13475 -107
2002-03 11125 13828 -2703
2003-04 14905 14180 725
2004-05 13130 14533 -1403
2005-06 13384 14885 -1501
2006-07 14198 15238 -1040
2007-08 14762 15590 -829
2008-09 14566 15943 -1377
2009-10 14662 16295 -1634
2010-11 18241 16648 1593
2011-12 17089 17000 88
2012-13 18343 17353 990
2013-14 19255 17705 1550
2014-15 17152 18058 -906
2015-16 16348 18410 -2062
2016-17 22950 18763 4187
Intercept 11360
Slope 353
Projected production
2017-18 19115
2018-19 19468
2019-20 19821
2020-21 20173
2021-22 20526

15

Appendix 2. Deviation of actual production from predicted production in Arhar
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 2660 2128 532
1997-98 1850 2182 -332
1998-99 2708 2236 472
1999-00 2694 2290 404
2000-01 2246 2344 -97
2001-02 2260 2398 -138
2002-03 2186 2452 -266
2003-04 2356 2506 -149
2004-05 2347 2560 -213
2005-06 2738 2614 124
2006-07 2314 2668 -354
2007-08 3076 2722 354
2008-09 2266 2776 -510
2009-10 2465 2830 -365
2010-11 2861 2884 -23
2011-12 2654 2938 -284
2012-13 3023 2992 31
2013-14 3174 3046 128
2014-15 2807 3100 -293
2015-16 2561 3154 -593
2016-17 4780 3208 1572
Intercept 2074
Slope 54

16

Appendix 3. Deviation of actual production from predicted production in Gram
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 5570 4696 874
1997-98 6132 4886 1246
1998-99 6801 5077 1724
1999-00 5118 5267 -149
2000-01 3855 5457 -1602
2001-02 5473 5648 -175
2002-03 4237 5838 -1601
2003-04 5718 6029 -311
2004-05 5469 6219 -750
2005-06 5600 6409 -809
2006-07 6334 6600 -266
2007-08 5749 6790 -1041
2008-09 7060 6980 80
2009-10 7476 7171 305
2010-11 8221 7361 860
2011-12 7702 7552 151
2012-13 8833 7742 1091
2013-14 9526 7932 1594
2014-15 7332 8123 -790
2015-16 7058 8313 -1255
2016-17 9330 8503 827
Intercept 4506
Slope 190

17

Appendix 4. Deviation of actual production from predicted production in Urd
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 1348 1142 206
1997-98 1378 1184 193
1998-99 1350 1227 123
1999-00 1331 1270 61
2000-01 1296 1313 -16
2001-02 1499 1356 143
2002-03 1474 1399 75
2003-04 1471 1441 30
2004-05 1327 1484 -158
2005-06 1245 1527 -282
2006-07 1443 1570 -127
2007-08 1457 1613 -156
2008-09 1175 1656 -481
2009-10 1236 1698 -463
2010-11 1779 1741 38
2011-12 1785 1784 1
2012-13 1971 1827 144
2013-14 1699 1870 -171
2014-15 1959 1912 47
2015-16 1945 1955 -10
2016-17 2800 1998 802
Intercept 1099
Slope 43

18

Appendix 5. Deviation of actual production from predicted production in Moong
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 1319 958 361
1997-98 950 991 -42
1998-99 1162 1025 137
1999-00 1077 1058 20
2000-01 1023 1091 -68
2001-02 1111 1125 -14
2002-03 867 1158 -291
2003-04 1702 1191 511
2004-05 1058 1225 -167
2005-06 946 1258 -312
2006-07 1115 1292 -176
2007-08 1523 1325 198
2008-09 1035 1358 -324
2009-10 692 1392 -699
2010-11 1862 1425 437
2011-12 1634 1459 176
2012-13 1186 1492 -306
2013-14 1606 1525 80
2014-15 1503 1559 -56
2015-16 1593 1592 1
2016-17 2160 1625 535
Intercept 924
Slope 33


19

Appendix 6. Deviation of actual production from predicted production in Lentil
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 962 916 46
1997-98 804 922 -118
1998-99 938 928 10
1999-00 1079 933 146
2000-01 915 939 -24
2001-02 974 944 30
2002-03 873 950 -77
2003-04 1038 956 82
2004-05 994 961 33
2005-06 946 967 -21
2006-07 913 973 -60
2007-08 812 978 -167
2008-09 953 984 -31
2009-10 1032 990 42
2010-11 944 995 -52
2011-12 1059 1001 58
2012-13 1134 1007 127
2013-14 1018 1012 5
2014-15 1035 1018 17
2015-16 976 1024 -48
Intercept 911
Slope 6
20

Appendix 7. Deviation of actual production from predicted production in Other Pulses
(000 tonnes)
Year Actual production Predicted production (trend line) Deviation
1996-97 2290 1919 371
1997-98 1858 1938 -80
1998-99 1949 1957 -8
1999-00 2119 1976 143
2000-01 1739 1995 -256
2001-02 2051 2015 37
2002-03 1488 2034 -545
2003-04 2620 2053 568
2004-05 1935 2072 -137
2005-06 1909 2091 -182
2006-07 2079 2110 -31
2007-08 2146 2129 16
2008-09 2078 2148 -70
2009-10 1762 2167 -406
2010-11 2574 2186 387
2011-12 2254 2206 49
2012-13 2196 2225 -28
2013-14 2233 2244 -11
2014-15 2515 2263 252
2015-16 2216 2282 -66
Intercept 1900
Slope 19
21


Appendix 8. Negative deviation from normal production at different insulation levels
Arhar Gram Urd Moong Lentil Others Total
Insulation
(%)
Stock
#
Year Insulatio
n
(%)
Stock
#
Year Insulation
(%)
Stock
#

Year Insulation
(%)
Stock
#
Year Insulation
(%)
Stock
#
Year Insulation
(%)
Stock
#
Year
100 -593 2015-16 100 -1602 2000-01 100 -481 2008-09 100 -699 2009-10 100 -167 2007-18 100 -545 2002-03 -4087
92 -510 2008-09 91 -1601 2002-03 89 -463 2009-10 91 -324 2008-09 89 -118 1997-98 92 -406 2009-10 -3422
85 -365 2009-10 82 -1255 2015-16 78 -282 2005-06 82 -312 2005-16 78 -77 2002-03 83 -256 2000-01 -2547
77 -354 2006-07 73 -1041 2007-08 67 -171 2013-14 73 -306 2012-13 67 -60 2006-07 75 -182 2005-06 -2114
69 -332 1997-98 64 -809 2005-06 56 -158 2004-05 64 -291 2002-03 56 -52 2010-11 67 -137 2004-05 -1779
62 -293 2014-15 55 -790 2014-15 44 -156 2007-08 55 -176 2006-07 44 -48 2015-16 58 -80 1997-98 -1543
54 -284 2011-12 45 -750 2004-05 33 -127 2006-07 45 -167 2004-05 33 -31 2008-09 50 -70 2008-09 -1429
46 -266 2002-03 36 -311 2003-04 22 -16 2000-01 36 -68 2000-01 22 -24 2000-01 42 -66 2015-16 -751
38 -213 2004-05 27 -266 2006-07 11 -10 2015-16 27 -56 2014-15 11 -21 2005-06 33 -31 2006-07 -597
31 -149 2003-04 18 -175 2001-02
18 -42 1997-98
25 -28 2012-13
23 -138 2001-02 9 -149 1999-02
9 -14 2001-02
17 -11 2013-14
15 -97 2000-01


8 -8 1998-99
8 -23 2010-11



*negative deviation of actual production from the trend line production in 000 tonnes