The parched Indian fields may not have been able to provide us affordable pulses this year. But that is no reason to despair. Farmers across the world are rushing to plant a record number of acres to feed our love for the daily dal-chawal. India has become for the global pulses market what China is for metals. In short, it is calling the shots.
Do you know how much an Indian farmer earns? In 17 states, he earns less than ₹20,000 annually, according to National Sample Survey (NSS) data. When it came to power in 2014, the BJP had promised to double farmer incomes in five years. It is now trying to make good that promise, with this year's Budget taking a few big strides and some baby steps towards it.
Did you know that Indian agriculture's net export earnings are higher than those by services and manufacturing? In fact, the agriculture sector enjoys one of the highest productivity and international competitiveness amongst all the sectors of our economy. Instead of handling it as a child with special needs, we have to start treating agriculture like the good business it is.
Modern markets are about turning scarcity into abundance. To feed itself, India urgently needs an agriculture that is efficient and resilient to climate change. The movers of money and credit do the economy a great service by the market signals they provide to entrepreneurs. Cash crops are signaling they need help.
Tur dal has become a status symbol - again. And that is hardly surprising. Pulses - tur, chana, lentils, moong, urad - are highly susceptible to hot weather, pests and disease. Unless we take dramatic steps to protect them from the effects of climate change and other dangers, the primary source of proteins for vegetarians in India are going to remain off the table.
Every consumer in India has a stake in the food economy. And the biggest risk facing our food economy and food security is the lack of reliable big data on the availability of cereals, pulses, sugar, cooking oil, fruits and vegetables. Its absence is also the primary cause of rural distress.
India's commodity markets have been illiquid, ill-equipped and ill-connected ever since their inception in 2003 due to a combination of outdated laws and ill-informed policymakers. Now, 12 years later, this is set to change. SEBI has taken over as the new regulator and guardian of the commodity market, which will now be governed by the Securities Contracts (Regulation) Act, 1956, applicable to stock exchanges. India's commodity markets have a fighting chance to emerge from the shadows. Here are five steps SEBI can take to make it happen.
Gold has plunged to a five-year low. Is the gold story then over, for now? As with everything else in this market, nothing is as it seems. Whether it is vegetables, iron ore or smart phones, we know prices fall when there is either too much supply or not enough demand. Gold supply has clearly not shot through the roof. And demand for physical gold in India and China, the biggest markets, is nowhere near satiated. What has changed?
In most states, mandis are established and regulated under the State APMC (Agricultural Produce Marketing Committee) Acts. The state's geographical area is divided into smaller market areas, where the markets are managed by Market Committees constituted by the state government. A system of licenses bars the entry of traders from other states and other mandis. Since there is no mechanism for clearing and settlement of dues, no one does business with strangers. In short, these mandis are the place where politics meets economics in the agrarian economy.
The suicide of a farmer at the AAP rally today in the heart of Delhi is a stark symbol of rural anger and helplessness. It is an equally grim reminder that political parties have no solution to offer other than a relentless barrage of sound bites and photo opportunities at the hospital.
Going by the number of farmers, Indian agriculture is the nation's largest private enterprise. And also the only one lacking free markets. So it is hardly surprising that half of India's population, since it depends on agriculture, contributes only 15% of the country's income.